Make no mistake about it: EVs are here to stay, even if demand is currently down. Leading EV stocks to buy in the sector remain strong buys on secular trends that have not changed materially. It’s quite straightforward.
The EV sector is going through growing pains. Electric vehicles are expensive and that is slowing the transition along the adoption curve. The early adoption phase is essentially over. Yet prices remain high. That’s driving demand lower and preventing a shift into mainstream adoption that will be temporary.
Global markets have signaled that EVs are the future. Governments have undertaken massive efforts to subsidize their adoption. Stick with EV stocks to buy in the leading markets at this time.
Li Auto (LI)
Li Auto (NASDAQ:LI) is a strong EV stock in the largest market globally. That simple but powerful truth makes it a worthwhile investment as the sector matures.
The EV market is transitioning to mainstream adoption. Early zeal has subsided and in any industry that causes issues and fear. It’ll be no different with EVs.
Investors should look beyond the fear that’s gripping the market at present and instead focus on figures. There’s overarching fear about EVs and there’s overarching fear that China’s growth is going to subside drastically. That’s just fear. The figures for Li Auto tell a different story.
The company delivered 40,422 vehicles in October. It marked the first time that the firm surpassed 40,000 monthly deliveries in its history. It also represented more than 300% growth on a year-over-year basis.
LI stock has plenty of upside in store for investors based on price projections. Delivery data should serve as a potent indication that the stock will continue to move in that direction.
Tesla (NASDAQ:TSLA) is in a very strong position right now and the markets continue to fail to recognize that truth.
Overall, Tesla is far and away the dominant U.S. EV firm and maintains a strong presence globally. The recent UAW strikes have provided Tesla an advantage that isn’t being priced into shares at the moment.
Those strikes cost the big 3 U.S. automakers a lot of money in down time, negotiations, and higher wages ultimately. The strikes also did something else that benefits Tesla immensely: They’ve pushed Ford (NYSE:F) and General Motors (NYSE:GM) to rethink EVs momentarily. GM is no longer providing EV production targets and Ford is delaying $12 billion in EV investment following the strikes.
The result is clear: The big three have been severely handicapped in their fight to gain EV market share from Tesla. The strikes were a gift to Tesla that should serve to strengthen its position for several quarters and make TSLA shares much more attractive.
XPeng (NYSE:XPEV) is another of several strong Chinese EV manufacturers that investors should not ignore.
Like Li Auto, XPeng is experiencing rapid growth. Take, for example, XPeng’s Q2 deliveries of 23,205 vehicles. That represented a 27% increase over deliveries during the first quarter.
The company isn’t slowing down. In October, it delivered more than 20,000 in the month alone. That was a record and almost as many sales in the month as all of the second quarter. XPeng sells in China and has entered European markets as well. It isn’t satisfied to rely on the domestic market alone.
That said, XPeng’s G6 SUV is the best selling vehicle in its segment in the country.
XPeng continues to expand its lineup and is slated to release an electric minivan, the X9, at some point in the future. XPeng is also developing flying cars through its XPeng AeroHT subsidiary. It’s an exciting option in EV stocks to buy that promises big returns for investors with a bit of patience.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.