With oil prices continuously rising this year, people have every reason to shift to electric vehicles. However, the concerns of a global slump could affect companies as consumer sentiment subsides over what would be next for the economy, as per Forbes.
Tesla announced that the company was cutting prices in China because of softening demand and recession concerns. There are also other concerns involving what this will do for EV demand as fears of a global recession steadily impact the stock market.
So, are electric car stocks a go right now?
What are the best electric EVs in 2022?
When it is about the top electric cars on the market, Forbes looked through expert suggestions and made a list of the best EVs this year.
The top options going into Winter 2022 include (in no particular order):
- 2022 Tesla Model 3
- 2022 Kia Niro EV
- 2022 Polestar 2
- 2023 Chevrolet Bolt EV
- 2023 Nissan Leaf
- 2023 Mini Electric Hardtop
While everyone relates Tesla with EVs and possibly thinks they are the best on the market, many others are ascending the ranks. This indicates several opportunities to invest in this industry moving ahead.
How to invest in electric cars
There are several ways to invest in EVs. These options include:
- Companies that make batteries for electric vehicles
- Companies that make charging stations for electric cars
- Companies that specialize in making electric cars
- Suppliers of EV battery components
However, which companies should be best to invest in? Well, it depends on what type of investor you want to be. When demand for EVs grows, all of the EV companies benefit.
What are the best EV stocks right now?
There are many stocks worth looking into, as you assess these picks, keep in mind that EV stocks have not surpassed the market lately due to concerns of an economic slowdown that may hurt demand in the market.
EVs are still seen as a luxury, although retail prices have transformed to be more competitive, especially when consumers take in the maintenance and fuel costs.
Furthermore, it is also essential to spend extra attention on startups as they try to ramp up production. Here are a few notable electric car stocks you should know about.
Tesla (TSLA)
Tesla remains in the news for different reasons, including the latest earnings to the creation of a humanoid robot. Although the stock has been down recently for various reasons, it is still a stock worth following.
General Motors (GM)
GM lately announced a new EV energy venture that would compete with Tesla in terms of energy management.
GM thinks that the energy storage and management market potential is over $120-$150 billion. Accordingly, the carmaker launches its Ultium Charge 360 public charging stations alongside Ultium Home and Ultimum Commercial services.
The manufacturer will offer hydrogen fuel cells, solar panels, and storage batteries.
QuantumScape (QS)
This company is one of the leaders in solid-state battery development. The aim is to mass-produce them one day.
Analysts should give attention to the company’s next earnings report to look at how the next generation of cutting-edge batteries does. The batteries utilize lithium-metal technology to charge a vehicle to around 80% of its full capacity in approximately 15 minutes.
Rivian Automotive Inc. (RIVN)
Rivian was the first company to put an electric pickup truck on the market. The company lately had an issue with recalling vehicles, but the automaker claimed that all of these vehicles are repaired.
This Amazon-backed company made over 13,000 trucks since production began at the end of 2021.
ChargePoint Holdings Inc. (CHPT)
ChargePoint operates over 18,000 charging stations and lets you invest in EVs without a specific manufacturer.
Shares have recently lessened due to concerns over the future EV demand. However, the company would not disclose its earnings report until December.
Albemarle (ALB)
As one of the largest lithium miners in the world positions the company to benefit from the electric vehicle market.
Since lithium is needed in batteries for energy storage systems, Albemarle will be benefiting from electric cars as they slowly become more popular. However, lithium stocks may face difficulties if EV demands slow down because of economic concerns.
Lucid Group, Inc. (LCID)
Lucid manufactures luxury EVs, which is a market that might be lucrative one day. With Tesla’s management, the company concentrates on EV’s high-end market.
The company has over $3.5 billion in potential sales from current reservations. It built 2,282 vehicles in the third quarter of 2022 and also declared the opening of its first Middle Eastern showroom in Riyadh, Saudi Arabia.
In addition, the Saudi government agreed to buy about 50,000 Lucid EVs in the next decade.
What’s next for EV stocks?
Energy management can be the next competitive market in this space. However, there are still concerns about how the economy will affect EV demands moving further.
Concerns of a potential recession may lead to weaker EV demand and other luxury products.
Tesla CEO Elon Musk recently said that he believes most people don’t think it is wise to buy a gasoline car because the residual value will be low.
However, the jury is still out in that sense, as electric vehicles still have a long way before mass adoption.
EV sales amounted to 5.34% of the total auto market. Either this is a sign for a room to grow or there are hesitations on making the switch. It could likely be both as the market inevitably further points to EVs.
Should you buy EV stocks?
There’s a debate on whether the European energy crisis will drive more people to convert to renewable energy sources in general.
What we do know is that countries are initiating laws to aid in fighting climate change. Governments worldwide are investing huge amounts of money into greener energy sources development.
The US government recently passed the Inflation Reduction Act (IRA) into law. This further boosts companies to develop EVs and renewable energy sources.
On consumer spending, some of these incentives push users toward EVs. The IRA includes a $7,500 tax credit for a new EV purchase and around $4,000 for used EVs.
When Forbes evaluated Tesla’s stock, they looked at how much revenue the company makes from selling the regulatory credits that it earns from governments. As the world views renewable energy sources development and carbon emissions reductions, the future looks good for EV stocks.
However, you must also factor the current economy into how to invest your money since the latest inflation data puts more volatility to an already turbulent stock market.
How should you be investing?
EVs may potentially be the future, however, most investors think in the present, mainly our pending global recession. Most investors avoid growth stocks due to declines in discretionary consumer spending during an economic fall.
You can invest in a greener future with Q.ai’s Clean Tech Kit. This kit makes investing in the EV industry simpler. You’ll invest in an industry you believe in without needing to constantly track the costs and news as the stock prices changes.
Bottom Line
In this space, there may be an increase in demand as governments around the world look to introduce new laws to support carbon emissions reduction and renewable energy development.
With that being said, the electric car market needs more lithium mines to open globally to be up to speed with demand.
For that reason, many investors are looking to the Precious Metals Kit, as precious metals continue to take on a whole new light. In contrast to buying individual stocks, themed kits allow you to diversify your portfolio across entire industries, preventing investors from owning the wrong securities even if they have the right thoughts about electric vehicles.
