3 EV stocks to buy before the market starts to skyrocket in 2023
Investors looking into the electric vehicle space certainly have several options to choose from. In this market, many valuations among electric vehicle players have dropped to more attractive levels. However, choosing the best EV stock to buy is a bigger challenge than it seems.
That’s mainly because the current macro image isn’t pretty. Due to rapidly rising interest rates, growth stocks (such as in the EV sector) have been hit very hard by Mr. Indeed, the stock prices of many of the companies on this list are significantly below their peaks in 2020 or 2021. That’s because higher discount rates leave companies with years of worse earnings. before. That’s how things are going right now.
That said, investors looking for EV stocks to buy certainly have reason to consider these growth companies. First, what percentage of this sentiment and poor valuation has baked in a future negative environment? Second, growth in the electric vehicle sector is likely to continue, with most governments fully supportive of this technology transition.
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As the world goes electrified, the use of EVs is expected to be fully effective. In the US, subsidies to support electric vehicle adoption have certainly helped. Through President Biden’s recent Inflation Reduction Act, a $7,500 tax credit on new electric vehicles and $4,000 on used cars has been extended. This could further strengthen what is expected to become a core market for most automakers in just the next few years.
Here are three EV stocks to buy for investors with a long-term view of the sector right now.
Any EV stock list should start with Tesla (NASDAQ:TSLA).
Indeed, US-based Tesla is one of the most iconic electric vehicle brands in the world. The company’s flamboyant CEO, Elon Musk, has made headlines (for both good and bad) about his recent acquisition Twitter (NYSE:TWTR). And while many think this can be a distraction, as he is the CEO of several other large companies, this is clearly a man on a mission to solve complex problems. complex.
In the past, I had appreciated Tesla and continued to be skeptical of the company’s valuation. That’s because there’s so much high-quality competition out there, it just seems to be getting more and more aggressive in finding a piece of this growing pie. That said, Tesla will remain the leader in electric vehicles for at least the next few years. As a result, many expect Tesla to attract more car buyers into the company’s ecosystem, driving further growth over time.
There’s something to be said about first-mover advantage, and Tesla certainly has such an edge in this high-growth sector. Therefore, for investors looking to bet directly on this space, Tesla is the easiest option to consider right now.
Source: Around the World Photo / Shutterstock.com
An early-stage competitor to Tesla in the luxury electric vehicle space is Lucid (NASDAQ:LCID). This company is definitely on the list of many investors to buy EV stock for a variety of reasons. Indeed, in the minds of many investors, Lucid looks uncanny like Tesla could have been a decade ago.
It is a US-based company that designs, engineers, and builds its own vehicles from the ground up. The company’s aggressive growth plans start with production goals 6,000 to 7,000 electric vehicles in 2022.
As such, the company completed production of 2,282 EVs in the third quarter of 2022. These vehicles come from Lucid’s Arizona production facility, with a total of nearly 1,400 deliveries. As such, the number of production and delivery for the company in this early stage will continue to be the focus of many investors.
Lucid is also an interesting company to consider because of its global appeal. The company’s brand has seen strong demand from other global markets, with Lucid recently opened its first studio in Riyadh, Saudi Arabia. This luxury retail space will allow customers to experience the brand and its services in a luxurious way. The company has also adopted a direct-to-consumer model. This model will allow its customers to have the ultimate buying experience customized to their needs. This premium experience will be available for both online and offline inquiries.
For long-term investors looking for the “next Tesla,” Lucid is often the first choice that comes to mind. This company’s cars are definitely expensive, and if we’re in a recession, there’s some risk. We’ve all seen what Tesla can achieve, and Lucid could be on the verge of a boom.
Source: Robert Way / Shutterstock.com
Let’s round up the list of EV stocks to buy Polestar (NASDAQ:PSNY), we will?
This Sweden-based electric vehicle maker is another premium electric vehicle maker, which I’m more optimistic about than the previous two options.
That’s because Polestar is further along in the development process than other high-end Tesla EV competitors. The company recently announced delivered about 9,215 EVs in the third quarter of 2022. This is because the company increased production after some of the pandemic restrictions in China were eased.
Now, geopolitical risk applies to all companies on this list. Accordingly, Polestar, as a global player in this space, offers a risk-reward profile that is not for everyone. That said, it’s also a company on track to hit its global delivery target of 50,000 units by 2022. In terms of a higher level of competition, many see Polestar as the company with the potential to surpass it. far from Tesla’s impressive lead in this area.
I’m particularly impressed by the company’s Polestar 3 electric SUV, which is set to Made in USA. While more investment is needed in the near term, it is an attractive bet in this high growth space over the long term.
As of the date of publication, Chris MacDonald does not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication principles.
Chris MacDonald’s love of investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His past experience as a financial analyst coupled with his enthusiasm for undervalued growth opportunities contribute to his conservative, long-term investment view.
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