The 3 EV Stocks That Will Make Early Investors Rich
Electric vehicle sales are set to accelerate. In fact, according to an Ernst & Young survey, nearly half of consumers in the United Sates (48%) plan to buy an electric vehicle in the next two years. That’s a 19% jump year throughout year just in the U.S. So, we wanted to look at some of the top EV stocks to make you rich.
Unfortunately, one of the biggest concerns for those on the fence is the lack of EV charging infrastructure. In fact, nearly 51% of Americans are concerned about that. So, if the Biden Administration wants to achieve its goal of having 50% of all new auto sales be electric, it needs to get far more aggressive with charging stations. If not, adoption won’t proceed as quickly.
Still, despite those issues, Ernst & Young believes we’ll see about 82 million EVs on U.S. roads by 2035 from two million today. That being said, investors may want to consider these EV stocks to make you rich.
Albemarle Corp. (ALB)
One of the best ways to trade the EV boom is with lithium stocks, such as Albemarle (NYSE:ALB).
That’s because there’s far more lithium demand than supply at the moment.
Remember, according to Stellantis (NYSE:STLA) CEO Carlos Tavares, there’s not enough lithium to go around. Worse, according to the Boston Consulting Group (BCP), the lithium supply gap is projected to be 24% less than demand by 2035. Meanwhile, others warn we could see worsening shortages by 2025.
Automakers are so concerned about supply that they’ve gone into the mining business. For example, ALB will supply more than 100,000 metric tons of lithium to Ford Motor (NYSE:F). Even General Motors (NYSE:GM) just invested $650 million to get Lithium Americas’ (NYSE:LAC) Thacker Pass mine running.
We also have to consider that ALB has become an oversold, undervalued stock. That should change, though, with the supply-demand issues. Helping, ALB also just received a $90 million Department of Defense contract to boost lithium production at its North Carolina mine–which could help manufacture about 1.2 million EVs a year, initially.
Li Auto (LI)
We can also look at oversold shares of Li Auto (NASDAQ:LI).
After pulling back from about $48 to $34, the EV stock appears to have found strong support. From its current price of $35.42, I’d like to see it initially refill its bearish gap around $40 shortly. Helping, the company continues to see record delivery growth.
In August, for example, the company delivered 34,914 vehicles, an increase of about 664% year over year. Then, in September, Li Auto said it delivered 36,060, which is 212.7% year-over-year growth. With those numbers, third-quarter deliveries are now up to 105,108, which is about 296% year-over-year growth. Cumulative growth for the year is now up to 244,225.
Better, Bank of America analysts recently raised their price target on LI to $60 from $56, with a “Buy” rating. The firm added, “The company’s fourth new EREV model–L6–should start to contribute to sales in Q2-Q3 of 2024. Li Auto is also expected to launch its first BEV model in Q4 of this year and deliver it in Q1 of 2024, the firm states, raising its 2023, 2024, and 2025 expected sales volumes by 1%, 5%, and 23% respectively,” as noted by TipRanks.com.
Blink Charging (BLNK)
There are also EV charging stocks, like Blink Charging (NASDAQ:BLNK), which should benefit from a desperate need for more EV charging stations. Granted, its chart is nothing to write home about, but don’t write it off just yet. The company just raised its 2023 revenue target to a new range of $110 million to $120 million from $100 million to $110 million.
That new guidance followed news of an agreement with “Parkopedia to integrate over 4,000 Blink EV charging locations onto the Parkopedia platform in North America.”
Even better, analysts at UBS just initiated coverage of BLNK with a buy rating. The firm noted, “BLNK has begun migrating acquired chargers to the Blink Network, and consolidating financial reporting & CRM systems. We think these actions can help BLNK achieve breakeven adj EBITDA in 2025, a year ahead of consensus. With the shares down 84% in the last year, we see the current price as an attractive entry point with a 4:1 upside/downside skew.”
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
