The central theses
- As governments around the world spend money to develop renewable energy sources, the adoption of electric vehicles is sure to increase.
- Tesla announced it will cut prices in China, and many analysts are concerned about what that means for EV demand.
- There are many ways to invest in electric vehicles, including automakers, battery companies, charging stations, and even precious metals.
With oil prices around the world this year, people have every reason to turn to electric vehicles (EVs). However, rising concerns of a global recession could impact every business as consumer sentiment softens over the next steps for the economy.
Tesla recently announced that they were cutting prices in China due to slowing demand and fears of a recession. There are additional concerns about what this will mean for EV demand as fears of a global recession continue to affect the stock market.
So are electric car stocks a buy right now?
What are the best electric cars of 2022?
When it comes to the best electric cars out there, we’ve looked at expert suggestions and made a list of this year’s best electric vehicles.
The top options for winter 2022 include, in no particular order:
- 2022 Polestar 2
- 2023 Nissan Leaf
- 2022 Tesla Model 3
- 2023 Chevrolet Bolt EV
- 2022 Kia Niro EV
- 2023 Mini electric hard top
While everyone associates Tesla with electric cars and likely assumes they’re the best out there, there are plenty of competitors climbing the ranks. This offers several opportunities to invest in this industry in the future.
How to invest in electric cars
There are several ways you can invest in electric cars. Options include:
- Companies specializing in the manufacture of electric cars
- Companies that manufacture batteries for electric vehicles
- EV Battery Components Suppliers
- Companies that manufacture charging stations for electric cars
But which companies should you invest in? This depends on what type of investor you want to be. Unfortunately, when the demand for electric vehicles increases, all companies in this industry benefit.
What Are the Best EV Stocks Right Now?
There are many stocks worth checking out. As you review this pick, keep in mind that electric car stocks have not outperformed the market recently amid concerns of an economic slowdown that could hurt demand in the electric vehicle market. EVs are still seen as a luxury, although retail prices have become much more competitive, especially when consumers factor in maintenance and fuel costs.
In addition, it is worth paying special attention to startups in this area when trying to ramp up production. Here are a few notable electric car stocks to know about.
It is impossible not to make the brand synonymous with the market. Tesla remains in the news for a variety of reasons, including recent earnings from the hype surrounding a humanoid robot.
Even though the stock has fallen recently for a variety of reasons, it’s still a stock worth keeping an eye on.
General Motors (GM)
In a surprising turning point, GM recently announced a new EV power company that would allow them to compete with Tesla on power management.
GM believes the market potential for energy storage and management is around $120 billion to $150 billion. Consequently, the automaker is now launching its Ultium Charge 360 public charging stations along with the Ultium Home and Ultimum Commercial services.
The company will offer storage batteries, solar panels and hydrogen fuel cells.
This company is one of the leaders in solid state battery development. The hope is that one day they will be able to mass produce them.
Analysts will be paying close attention to the company’s next earnings report to see how the next generation of cutting-edge batteries fares. The batteries use lithium metal technology to charge a vehicle to around 80% of its full capacity in around 15 minutes.
Rivian Automotive Inc. (RIVN)
Rivian was the first company to launch an electric pickup truck. The company recently had a vehicle recall issue, but claims all of those cars have been repaired.
This Amazon-backed company has manufactured about 13,000 trucks since production began in late 2021.
ChargePoint Holdings Inc. (CHPT)
ChargePoint operates over 18,000 charging stations and enables you to invest in electric cars regardless of manufacturer.
Shares have fallen recently amid concerns about future demand for electric vehicles. However, the company will not release its earnings report until December.
As one of the largest lithium miners in the world, this company is in a solid position to capitalize on the electric vehicle market.
With lithium being used in everything from EV batteries to energy storage systems, Albemarle will benefit from electric cars as they become more popular. However, lithium stocks could struggle if demand for electric vehicles falls due to economic concerns.
Lucid Group, Inc. (LCID)
Lucid produces luxury electric vehicles, a market that could one day be potentially lucrative. With Tesla’s management, the company is focused on the high-end of the EV market.
This company has approximately $3.5 billion in revenue potential from current reservations. The company produced 2,282 vehicles in the third quarter of 2022 and also announced the opening of its first Middle East showroom in Saudi Arabia.
In addition, the Saudi government has agreed to purchase approximately 50,000 Lucid electric vehicles over the next decade.
What’s next for electric car stocks?
Energy management could be the next competitive market for this area. However, there are still concerns about how the economy will affect demand for electric vehicles in the future.
Concerns about a possible recession could lead to weaker demand for electric vehicles and other luxury items.
Elon Musk recently stated that he believes most people wouldn’t think it would be wise to buy a gas car at this point because the residual value will be low. However, this logic is still unclear as EVs still have a long way to go before mass adoption.
Still, EV sales accounted for just 5.34% of the total auto market. This is either a sign that there is room for growth or that the transition is still hesitant. Most likely, it’s both, as the market inevitably continues to trend toward EVs.
Should You Buy Electric Car Stocks?
Whether the European energy crisis will generally lead to more people switching to renewable energy sources is a matter of debate.
What we do know is that countries are introducing laws to combat climate change. Governments around the world are investing significant amounts of money in the development of greener energy sources.
The US government enacted the Inflation Reduction Act this summer. This has further motivated companies to develop renewable energy sources and electric vehicles.
In terms of consumer spending, some of these incentives are really pushing users towards EVs. The Inflation Mitigation Act provides a tax credit of $7,500 for the purchase of a new EV and $4,000 for a used EV.
When we evaluated Tesla stock, we looked at how much revenue the company makes from selling the regulatory credits it receives from governments. As the world scrambles to develop renewable energy sources and reduce carbon emissions, the future for EV stocks looks bright.
However, you must consider the current state of the economy when investing your money, as recent inflation data has added even more volatility to an already turbulent stock market.
How should you invest?
Electric vehicles may be the future, but most investors are thinking about the present, which is our approaching global recession. Most investors shy away from growth stocks because discretionary consumer spending falls during an economic downturn.
Invest in a greener future with Q.ai’s Clean Tech Kit. This kit simplifies investing in the electric vehicle industry. You invest in an industry you believe in without having to constantly follow prices and news when stock prices fluctuate.
As governments around the world seek to introduce new legislation to help reduce carbon emissions and encourage the development of renewable energy sources, there could be increased demand in this area.
However, the electric car market needs more lithium mines worldwide to keep up with demand. This is why many investors look to our Precious Metals Kit, as precious metals keep appearing in a whole new light. Investing in thematic kits diversifies your portfolio across entire industries, as opposed to buying individual stocks, which could result in investors holding the wrong securities even if they have the right idea about EVs.
Download Q.ai today for access to AI-supported investment strategies. If you deposit $100, we’ll add another $100 to your account.