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4 Stocks (Not Named Tesla) Set to Ride the Upcoming EV Boom
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Despite the overwhelmingly-bearish sentiment that has been pervasive across the global economy amid the coronavirus crisis, the electric vehicle (EV) sector remained a distinct silver lining, exhibiting an impressive growth trajectory during 2020.
Factors Driving the EV Frenzy
The EV market has seen robust growth on technological advancements and rapid digitization in the automotive sector. Further, rising consumer sensitivity and stringent government regulations toward an eco-friendly environment are boosting demand for zero-emission vehicles. In fact, favorable government policies backed by subsidies, grants, tax rebates and other non-financial benefits, and improved availability of charging infrastructure are fueling global EV sales. The increasing affordability of EVs is also making it more commercially viable for consumers.
While China is the world’s largest EV market, developed nations, including the United States, the U.K. and Germany, are actively encouraging the use of green vehicles to lower carbon emissions.
EV Prospects Look Bright
The future of transportation is green. With the increasing adoption of EVs, automakers are now making heavy investments to serve this surging demand, which will act as a further catalyst in the evolution of the EV market.
Per a Deloitte Report, the EV market is estimated to reach 31.1 million units by 2030 from 2.5 million units in 2020, at a compound annual growth rate (CAGR) of 29% during the forecast period. Also, it is projected that by 2030, China will capture 49% of the global EV market, Europe will account for 27%, and the United States will hold 14%.
EV Players in Focus
Amid this changing scenario, it has become imperative for industry players to reorient the business models and pull out all the stops toward an electrified future.
The first name that pops into our heads when we talk about EVs is Tesla (TSLA - Free Report) , which has garnered the most attention as the leader of zero-emission transportation provider. The California-based EV maker’s Model 3 is one of the best-selling electric vehicles in the United States, which is single-handedly propelling EV sales in the country. However, apart from Tesla, there are many other auto companies capitalizing on the soaring demand for green vehicles by notching up their EV game. These automakers are likely to emerge as long-term winners in the EV race. Our discussion shall revolve around four such companies.
General Motors (GM - Free Report) : The Detroit-based auto biggie has revolutionized the EV space with the launch of its ‘Ultium Drive’ system, which will pioneer the company’s transition to a fully-electric line-up in the near future. The automaker’s next-generation EVs are expected to be equipped with the Ultium Drive, thereby bringing cost efficiencies to the company. The automaker is also expediting plans to roll out electric cars and trucks over the next five years, and projects to spend $27 billion by 2025 on the initiative, higher than the previous budget of $20 billion. Moreover, the company is slated to unveil 30 EVs by 2025, two-thirds of which will be available in North America. Such efforts leave no room for doubt as to whether or not the company is fully committed to its electrification plans.
This Zacks Rank #1 (Strong Buy) company’s shares have witnessed a rise of 12.1% over the past year. The Zacks Consensus Estimate for the company’s fourth-quarter earnings is pegged at $1.7 per share, indicating year-on-year growth of a whopping 3,300%.
GreenPower Motor Company Inc. (GP - Free Report) : GreenPower is a leading manufacturer and distributor of zero-emission electric-powered medium- and heavy-duty vehicles. The Canadian manufacturer uses a ‘clean sheet’ design to build battery-powered and zero-emission electric buses and vehicles with a vision to advance the adoption of EVs. In 2014, the company unveiled its first purpose-built, battery-electric bus, the EV350, 40-foot transit bus, followed by the EV250, a 30-foot battery-electric bus. To date, the company has a line-up of 62 EVs, encompassing 57 EV Stars, 4 electric school buses, and 1 EV350. The company is well positioned to achieve a greater reach of its EVs, owing to its partnership with Creative Bus Sales, nation’s largest bus dealer. It currently carries a Zacks Rank #3 (Hold).
NIO Inc. (NIO - Free Report) : NIO — often dubbed as Tesla of China — is fast emerging as a rising star in the EV sector. The Chinese start-up car manufacturer is a relatively younger entrant in the EV space, racing to become a leader in the design and manufacture of EVs. Rising demand for ES6 and ES8 models are boosting this Shanghai-based company’s growth prospects. Moreover, the company recently launched the EC6 model, a coupe-style smart electric SUV, thereby facilitating its efforts in the EV space. The company has also rolled out a Battery as a Service (BaaS) subscription model that lets owners deal with charging needs by simply having a fresh battery pack installed in a matter of minutes. This one-of-its kind battery swap technology provides the company an edge over its rivals. Reportedly, the company delivered 5,291 vehicles in November, marking a year-on-year surge of 109%. This Zacks Rank #3 firm has had an amazing run on the bourses lately, skyrocketing 1,733.3% over the past year.
Hyliion Holdings Corp (HYLN - Free Report) : The company makes hybrid as well as fully-electric powertrain solutions for Class 8 commercial vehicles. The company has also introduced Hypertruck ERX, which has a fully-electric drivetrain, as well as a natural gas-powered onboard generator to charge the battery. This technology is in sync with the automaker’s vision of having a net-carbon-negative emissions solution for electrified trucks and commercial fleets, when using renewable natural gas. The company went public in October through a merger with Tortoise Acquisition Corporation, thus making itself another strong EV player on the stock market. Hyliion recently reported its third-quarter results, which happens to be its first earnings report since going public. The company recorded $1 million in revenues from delivering 20 trucks equipped with its electronic-axle system. Hyliion’s biggest rewarding point is that it can retrofit its technology on the existing fleets, giving it an upper hand over rivals. This Zacks Rank #3 company has witnessed a jump of 72.4% in a year’s time.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
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4 Stocks (Not Named Tesla) Set to Ride the Upcoming EV Boom
Despite the overwhelmingly-bearish sentiment that has been pervasive across the global economy amid the coronavirus crisis, the electric vehicle (EV) sector remained a distinct silver lining, exhibiting an impressive growth trajectory during 2020.
Factors Driving the EV Frenzy
The EV market has seen robust growth on technological advancements and rapid digitization in the automotive sector. Further, rising consumer sensitivity and stringent government regulations toward an eco-friendly environment are boosting demand for zero-emission vehicles. In fact, favorable government policies backed by subsidies, grants, tax rebates and other non-financial benefits, and improved availability of charging infrastructure are fueling global EV sales. The increasing affordability of EVs is also making it more commercially viable for consumers.
While China is the world’s largest EV market, developed nations, including the United States, the U.K. and Germany, are actively encouraging the use of green vehicles to lower carbon emissions.
EV Prospects Look Bright
The future of transportation is green. With the increasing adoption of EVs, automakers are now making heavy investments to serve this surging demand, which will act as a further catalyst in the evolution of the EV market.
Per a Deloitte Report, the EV market is estimated to reach 31.1 million units by 2030 from 2.5 million units in 2020, at a compound annual growth rate (CAGR) of 29% during the forecast period. Also, it is projected that by 2030, China will capture 49% of the global EV market, Europe will account for 27%, and the United States will hold 14%.
EV Players in Focus
Amid this changing scenario, it has become imperative for industry players to reorient the business models and pull out all the stops toward an electrified future.
The first name that pops into our heads when we talk about EVs is Tesla (TSLA - Free Report) , which has garnered the most attention as the leader of zero-emission transportation provider. The California-based EV maker’s Model 3 is one of the best-selling electric vehicles in the United States, which is single-handedly propelling EV sales in the country. However, apart from Tesla, there are many other auto companies capitalizing on the soaring demand for green vehicles by notching up their EV game. These automakers are likely to emerge as long-term winners in the EV race. Our discussion shall revolve around four such companies.
General Motors (GM - Free Report) : The Detroit-based auto biggie has revolutionized the EV space with the launch of its ‘Ultium Drive’ system, which will pioneer the company’s transition to a fully-electric line-up in the near future. The automaker’s next-generation EVs are expected to be equipped with the Ultium Drive, thereby bringing cost efficiencies to the company. The automaker is also expediting plans to roll out electric cars and trucks over the next five years, and projects to spend $27 billion by 2025 on the initiative, higher than the previous budget of $20 billion. Moreover, the company is slated to unveil 30 EVs by 2025, two-thirds of which will be available in North America. Such efforts leave no room for doubt as to whether or not the company is fully committed to its electrification plans.
This Zacks Rank #1 (Strong Buy) company’s shares have witnessed a rise of 12.1% over the past year. The Zacks Consensus Estimate for the company’s fourth-quarter earnings is pegged at $1.7 per share, indicating year-on-year growth of a whopping 3,300%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
GreenPower Motor Company Inc. (GP - Free Report) : GreenPower is a leading manufacturer and distributor of zero-emission electric-powered medium- and heavy-duty vehicles. The Canadian manufacturer uses a ‘clean sheet’ design to build battery-powered and zero-emission electric buses and vehicles with a vision to advance the adoption of EVs. In 2014, the company unveiled its first purpose-built, battery-electric bus, the EV350, 40-foot transit bus, followed by the EV250, a 30-foot battery-electric bus. To date, the company has a line-up of 62 EVs, encompassing 57 EV Stars, 4 electric school buses, and 1 EV350. The company is well positioned to achieve a greater reach of its EVs, owing to its partnership with Creative Bus Sales, nation’s largest bus dealer. It currently carries a Zacks Rank #3 (Hold).
NIO Inc. (NIO - Free Report) : NIO — often dubbed as Tesla of China — is fast emerging as a rising star in the EV sector. The Chinese start-up car manufacturer is a relatively younger entrant in the EV space, racing to become a leader in the design and manufacture of EVs. Rising demand for ES6 and ES8 models are boosting this Shanghai-based company’s growth prospects. Moreover, the company recently launched the EC6 model, a coupe-style smart electric SUV, thereby facilitating its efforts in the EV space. The company has also rolled out a Battery as a Service (BaaS) subscription model that lets owners deal with charging needs by simply having a fresh battery pack installed in a matter of minutes. This one-of-its kind battery swap technology provides the company an edge over its rivals. Reportedly, the company delivered 5,291 vehicles in November, marking a year-on-year surge of 109%. This Zacks Rank #3 firm has had an amazing run on the bourses lately, skyrocketing 1,733.3% over the past year.
Hyliion Holdings Corp (HYLN - Free Report) : The company makes hybrid as well as fully-electric powertrain solutions for Class 8 commercial vehicles. The company has also introduced Hypertruck ERX, which has a fully-electric drivetrain, as well as a natural gas-powered onboard generator to charge the battery. This technology is in sync with the automaker’s vision of having a net-carbon-negative emissions solution for electrified trucks and commercial fleets, when using renewable natural gas. The company went public in October through a merger with Tortoise Acquisition Corporation, thus making itself another strong EV player on the stock market. Hyliion recently reported its third-quarter results, which happens to be its first earnings report since going public. The company recorded $1 million in revenues from delivering 20 trucks equipped with its electronic-axle system. Hyliion’s biggest rewarding point is that it can retrofit its technology on the existing fleets, giving it an upper hand over rivals. This Zacks Rank #3 company has witnessed a jump of 72.4% in a year’s time.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>