2 Top Electric Vehicle Stocks Investors Can Buy In 2022
September 16 2022 - 7:51AM
Finscreener.org
Electric vehicles or EVs are
battery-powered automobiles that don’t require fuels such as
gasoline or diesel. Several countries globally aim to incentivize
residents to purchase EVs due to concerns over climate change. So,
the demand for EVs is all set to explode all over the world in the
upcoming decade, making these stocks top bets for long-term growth
investors.
Let’s look at the top two
EV
stocks investors can consider buying right now.
An industry leader - Tesla
Tesla (NASDAQ: TSLA)
is the most popular electric vehicle manufacturer globally. In
2021. Tesla delivered 936,000 vehicles, with Q4 shipments standing
at 308,000. Tesla has created massive wealth for investors in the
past decade.
Tesla went public in June 2010 at
a split-adjusted price of $1.13 per share. Right now, Tesla stock
is trading at $305. So, a $1,000 investment in TSLA stock would
have returned close to $270,000 right now.
Tesla continues to march ahead
despite a challenging macro environment. It had to contend with
chip shortages and factory shutdowns in China, but the company is
on track to deliver one million EVs in 2022. In the first six
months of the year, Tesla delivered 564,743 EVs.
Due to its first mover advantage
and exceptional execution, Tesla reported a net income of $5.5
billion in 2021, up from just $721 million in 2020.
Tesla is forecast to increase
sales by 57% to $84.45 billion in 2022 and by 43.7% to $121 billion
in 2023. So, TSLA stock is priced at 7.65x 2023 sales which is
quite steep. But a market-leading growth stock commands a premium
valuation.
Further, Wall Street expects
Tesla to more than double its adjusted earnings from $2.26 per
share in 2021 to $5.85 per share in 2023, valuing it at 52x forward
sales.
A Chinese heavyweight
One of the largest electric car
manufacturers in China, NIO (NYSE:
NIO) should
also be part of your shopping list if you are hunting for EV
stocks. Between its IPO in September 2018 and January 2021, NIO
stock rose 520% and hit an all-time high of $62. ItU+02019s
currently trading at $21, which is 66% below record
highs.
Nio has a diversified portfolio
of EVs. In March, it launched the ET7, an electric sedan, while it
began deliveries of the ES7 EV SUV in Q2 of 2022. Nio also
emphasized it will add a new mid-sized sedan to its EV lineup,
which will be called the ET5.
In the June quarter, Nio
increased sales by 21% year over year to $1.4 billion.
Comparatively, vehicle deliveries rose by 14% to 25,059 units. The
company’s sales growth was the lowest in the last nine quarters,
while deliveries slumped by almost 3% on a sequential
basis.
Similar to Tesla, even Nio has to
grapple with supply chain bottlenecks, semiconductor chip
shortages, and higher commodity prices. These headwinds meant Nio
reported a net loss of $411 million in Q2, an increase of 370% year
over year. In fact, net losses also rose 54%
sequentially.
Nio will have to scale up
production and deliveries in the second half of 2022 and narrow its
losses considerably. The company expects deliveries between 31,000
and 33,000 units in Q3, while sales are forecast between $1.9
billion and $2.03 billion.
Analysts tracking NIO stock
expect revenue to rise from $5.4 billion in 2021 to $15 billion in
2023. So, itU+02019s valued at less than 2.5x forward sales, which
is quite cheap compared to Tesla. Further, Nio is also forecast to
narrow losses from $1 per share in 2021 to $0.21 per share in
2023.
NIO (NYSE:NIO)
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