According to the Q2 2024 Experian Automotive Trends Market Report, there are 3.9 million electric vehicles (EVs) on the road in the U.S., a significant increase over the past 12 months. Much of this continued growth is likely due to the generous tax rebates currently available.
With this growth in EV sales, it could be a great time to consider adding EV stocks to your investment portfolio. Using the free stock screener from Ziggma can be a great way to locate some of the best EV stocks to buy, or you can check out the list of companies we’ve put together below. Each of these would be a great stock to buy right now.
What Are EV Stocks?
When looking into EV stocks, you should understand that this is a pretty broad sector. It could include EV automobile manufacturers, EV battery producers, and even companies responsible for building EV charging stations.
While there are plenty of electric vehicle companies to invest in, this sector is still pretty new, which means volatility can be high. In addition to adding an individual EV stock to your portfolio, you could also consider an electric vehicle ETF.
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Best EV Stocks to Buy in 2024
Here are our five picks for the best electric vehicle stocks to include in your portfolio.
Tesla Inc. (TSLA)
Tesla is one of the most well-known electric vehicle stocks and the largest EV company, with a market cap of $1.10 trillion. However, investors in Tesla need to be willing to withstand price fluctuations. Over the past couple of years, Tesla’s stock price has seen some massive movements in either direction.
The biggest unknown for Tesla (and nearly everyone else in the EV market) is what Donald Trump’s presidential victory means for the future. Even though Tesla’s founder and CEO, Elon Musk, was a huge supporter during the presidential campaign, it’s expected that Trump could roll back many of the EV rebates that are currently available. However, given that Tesla holds such a market advantage, this could benefit them.
The stock price itself is not cheap. At a P/E ratio of 129.5x, it’s one of the more expensive EV stocks. However, with an effective asset utilization of 15.85%, its profitability is one of the highest in the industry.
Also read: Best Renewable Energy Stocks to Buy
ON Semiconductors (ON)
Even though sales numbers have lagged, many analysts believe ON Semiconductors is ready to break out. This company provides EV vehicle producers with chips and sensors, as well as other products. If you’re looking for a company with a little more diversity in its product line, then ON Semiconductors would be a great choice. While they supply EV companies, they also work within other industries as well.
Even though they are expected to have a slight revenue drop in 2025, investors should be encouraged by their profitability. This can be seen with their effective asset utilization of 17.35%. Plus, with a current stock price of $69.97 (as of November 11, 2024), analysts feel there is a 23% upside from here.
Rivian Automotive Inc. (RIVN)
Rivian has been suffering through a difficult 2024, down more than 47% year-to-date (YTD). In its most recent earnings, the company reported worse than expected revenue as it fell 35% to $874 million and a net loss of $1.1 billion. However, much of the decline was due to supply chain issues that slowed production. Rivian’s CEO said he expects this to be a short-term issue.
However, with this sharp decline, now might be a great time to buy the dip. With the upcoming release of the new R2 vehicles, there should be a further increase in demand, which will help its increasing earnings per share which are estimated to grow from -$5.96 over the trailing 12 months to -$2.73 in 2025.
LI Auto Inc. (LI)
We’ve talked about Tesla and Rivian, which are both household names, but many investors in the United States probably haven’t heard of LI Auto Inc. This Chinese EV manufacturer is one of China’s top producers of plug-in hybrid electric vehicles. Plus, earlier this year, it released its first fully battery-powered vehicle.
The company’s first full year of production was in 2020, and from 2020 until 2023, its deliveries skyrocketed from 32,624 to 376,030. This huge leap in deliveries allowed it to first turn a profit during fiscal year 2023.
Even with some of the positives, the company still faces some headwinds. Severe price wars in the EV market are shrinking margins for many manufacturers. However, even with this, analysts expect annual revenue to grow by 25% over the next couple of years and net income to grow by 15%.
EVgo Inc. (EVGO)
With the huge increase in electric vehicles on the road, there must be a way to keep them all charged while on the go. That’s where EVgo Inc. comes into the picture. EVgo is one of the nation’s largest charging networks for electric vehicles.
Recently, it released its third-quarter earnings, and there was a lot for investors to celebrate. During the quarter, the company had record revenue of $67.5 million, which was a 92% increase year over year (YoY). Plus, the network throughput reached a record 78 gigawatt-hours, a 111% YoY increase. Finally, EVgo added 147,000 new customers, a 39% increase YoY. They now have a total of 1.2 million customers.
With revenue expected to continue increasing over the next few years, analysts think there is still a 23% upside for the stock price from its current position.
How to Buy EV Stocks
If you want to purchase EV stocks for your portfolio, you can do so through most brokerage firms. If you don’t currently have a broker, make sure you check out our list of brokers that offer free stocks.
Plus, once you’ve added any of these electric vehicle stocks to your portfolio, use Ziggma’s free portfolio tracker to monitor the performance of your entire portfolio.
The Bottom Line
Adding EV stocks to your portfolio can be a great way to add a little extra diversification. However, it’s important to remember that many EV stocks are early-phase companies which means there can be a lot of volatility. Also it remains to be seen how the new Trump legislation will address EV subsidies. Read our recent blog post “The best mid cap stocks for a Trump government“. Make sure investing in EV stocks fits within your risk tolerance before investing.