An Indian investor may build a stack of EV stocks while investing in the US stock market with a long term view.
The rotation away from tech stocks seems to have taken hold and market leadership is likely to change.
The next sunrise sector could be the electric vehicles industry and can have a much bigger global impact than we are currently estimating. With the expansion of the EV sector, the potential of creating wealth over the long term could be once-in-a-lifetime opportunity for investors. The shift towards battery-powered cars and commercial vehicles will keep the EV stocks in focus. For the Indian investors, there are several EV battery stocks or EV charging stocks that one may consider to invest in the US stock market. The better approach could be to build a stack of EV stocks to buy and start accumulating them as a theme.
Buying low and selling high remains the mantra for creating wealth in the stock market and buying EV stocks may just work in your favour in the long term. As an investor, it is always better to be diversified and a portion of your portion may well go into the EV stack as an upcoming theme of the future. According to Fortune Business Insights, the global electric vehicle market will be worth $985.72 billion by 2027, growing at a compound annual growth rate (CAGR) of 17.4% over the next six years.
The most promising EV stock for the US investors has been Tesla with over 300 per cent return in the last 12 months. NIO, also called the Chinese Tesla, with its NYSE listed ADR has generated more than 3000 per cent over the last 12 months. While the race is still on to grab the next Tesla stock, according to Josh Dylan, a contributor on Nasdaq website, here are a few EV stocks that are directly or indirectly impacting the EV segment of the market.
According to Cylan, the top EV Stock list may include these:
Fisker (NYSE: FSR)
QuantumScape (NYSE: QS)
Blink Charging (NASDAQ: BLNK)
Green Power Motor (NASDAQ: GP)
Fisker is an electric vehicle automaker that is based in California and is revolutionizing the automotive industry by developing next-generation electric vehicles. The company’s shares have begun to show signs of life after trading sideways for a few months since November 2020. This came after Morgan Stanley analyst Adam Jones initiated coverage of Fisker with an overweight rating and a price target of $27. Currently the stock is trading around $17.
QuantumScape may not be exactly an EV stock, but it is a pick-and-shovel play amid the EV boom that is worth the attention. The company is a renewable energy company that produces solid-state lithium-metal batteries for electric cars. QuantumScape’s batteries are game-changing as they significantly increase energy densities and enable fast charging.
The analyst believes that QuantumScape is very well positioned to serve domestic EV players. For the uninitiated, QuantumScape claims that its batteries will store over 80% more energy than existing lithium-ion competitors while reducing costs substantially.
Like Fisker, QS stock has made some bullish moves recently amid an ‘Overweight’ rating and a new price target of $70. Currently the stock is trading around $58.
Another pick-and-shovel play riding the EV boom, and riding it well is Blink Charging. Since June 2020, BLNK stock has skyrocketed more than 2,500%. Blink Charging operates a network of nearly 15,000 electric vehicle charging stations as of December 31, according to the company.
On February 16, Blink announced a cooperation with Bisimoto Engineering to promote Blink as their charging solution of choice and to support EV adoption nationwide. While Blink has a relatively simple business model, its shares are now trading at an astronomical level. Currently the stock is trading around $44.
Green Power Motor Inc.
Last on the list, there is electric bus maker Green Power Motor. If you are bullish about the electrification of the world’s commercial fleet and you concur that the commercial EV revolution is just getting underway, you might want to include GP stock on your watchlist today.
Every year, fleet operators worldwide purchase about 10 million medium-to-heavy duty commercial busses, trucks, and vans. Only a small number are electric. Bloomberg NEF estimated that only around 3,600 electric medium- and heavy-duty commercial vehicles and busses were sold in the U.S. in 2020. That’s a drop in the ocean. But things may change as government policies evolve and environmental awareness increases. Currently the stock is trading around $39.90.
Disclaimer: The investing decision in these or any other stock should be taken on your own after carefully evaluating the business and other fundamentals of the company or after consulting one’s financial advisor. It is not a recommendation to buy, hold or sell in any of the stocks. Financial Express Online does not bear any responsibility on investing decisions made by readers/investors.
Looking to invest in US Stocks? Open a free account with Stockal - India's first borderless investment platform.