Exclusive electric vehicle (EV) players had an astounding run last year despite the coronavirus pandemic. In fact, EV companies easily outstripped internal combustion engine (ICE) players. This is primarily because EV adoption helped in reducing fuel costs at a time when finances were stretched, and jobs were scarce amid lockdown measures implemented by the government to curb the spread of coronavirus. At the same, rising awareness among the populace regarding environmental issues has also been aiding the shift toward EVs from gasoline-driven automobiles to trim CO2 emissions.
As mentioned in a
spglobal.com article, EV-volumes said that global EV sales had jumped 43% to touch 3.24 million units for the first time last year, while the global market share of EVs advanced to 4.2% in 2020 from 2.5% in 2019. The article also mentioned that EV-volumes believe that “global EV sales have returned to the S-Curve [growth trajectory] in terms of volume and are somewhat above trend in terms of share.” To put things into perspective, last year’s EV sales didn’t even include the array of new EV models positioned to hit the market this year and beyond.
In fact, according to the article, EV-volumes added that particularly plug-in EV sales are expected to reach 4.6 million this year, with major growth expected in China and North America. Last year, Europe had witnessed stupendous growth in EV sales. Yet, this year EV sales in Europe aren’t going to be dull but steady. What’s more, per Fortune Business Insights, the global EV market is expected to be worth $985.72 billion by 2027, thereby expanding at a compounded annual rate of 17.4% in the next six-year period, citing from a
Interestingly, IHS Markit has also predicted that EVs will almost double their market share this year compared to last year, with EVs projected to make up almost 10% of new vehicles sold globally by 2025, as mentioned in a
cnet.com article. Hence, the bottom line is that EVs market share will continue to expand amid the need for automakers to fulfill emission norms. Of course, EV sales will further increase on the back of an improving global economic condition, rise in the pace of vaccination, and predominantly a low-interest-rate environment worldwide, which no doubt should provide the wherewithal to buy a new car.
And with EV sales expected to increase in the days to come, electric car manufacturers are undoubtedly poised to benefit. Improved sales will boost profit margins and vis-à-vis share prices of such companies. Notable among them are
Tesla, Inc ( TSLA Quick Quote TSLA - Free Report) , General Motors ( GM Quick Quote GM - Free Report) and Toyota Motor ( TM Quick Quote TM - Free Report) .
Tesla currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for its current-year earnings increased 6.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 81.7%. Similarly, General Motors has a Zacks Rank #3, while Toyota Motor sports a Zacks Rank #1 (Strong Buy). General Motors and Toyota Motor’s expected earnings growth rate for the current year is 3.9% and 2.3%, respectively. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Meanwhile, with the EV market expected to grow in the near future, demand for electric vehicle batteries is poised to improve as well. In fact, according to a
PRNewswire article, Technavio expects the global electric vehicle battery market to increase by $37.69 billion during the period 2021-2025. Thus, keeping an eye on Albemarle Corporation ( ALB Quick Quote ALB - Free Report) won’t be a bad proposition. At present, the top lithium producer has a Zacks Rank #3, and its projected earnings growth rate for the next five-year period is 11.8%.
Now, it’s quite evident that with an increase in demand for EVs in the near future, the need for more power generation will increase. And with an expected rise in electricity consumption, companies like
Xcel Energy Inc. ( XEL Quick Quote XEL - Free Report) are very much poised to gain. Currently, Xcel has a Zacks Rank #3. The company’s expected earnings growth rate for the current and next year is 6.5% and 6.7%, respectively. In fact, the company’s expected earnings growth rate for the next five-year period is 6.2%. Zacks Names “Single Best Pick to Double”
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