Imagine if you had invested in Tesla Inc. (TSLA:NASDAQ) in January 2012.
A $10,000 investment could have bought about 1,800 shares worth $1.6 million at March 2022 prices. With that in mind, let’s explore some of the lesser-known stocks that may benefit from the growth of electric vehicles (EVs).
The best way to hunt for the next Tesla is to think broadly about the growth of the electric vehicle industry. You might start by looking at direct competitors that produce electric vehicles — but that’s just the tip of the iceberg. There are also firms positioned for growth by building infrastructure, making batteries, and mining critical materials.
China is quickly becoming a leader in the EV market with more than 3.3 million electric vehicles sold there in 2021, according to Fortune. One way to gain exposure to the Chinese market is through Li Auto Inc. (LI:NASDAQ). It's based in Beijing, but you can buy the stock on the NASDAQ.
Like Tesla, Li has focused on premium vehicles like the Li One, a luxury EV with a range of up to 671 miles (1,080 km). The business has sold over 100,000 units of the vehicle, which sells for about $51,000 (328,000 yuan).
The company lost $121 million in 2020, an improvement from the $471 million it lost in 2019. Its market cap is $35 billion, and its price-to-sales ratio is 6.6.
Based in California, ChargePoint Holdings Inc. (CHPT:NYSE) is focused on building out charging stations — the electric vehicle equivalent of gas stations. The company is reporting significant growth in revenue, which was up 90% to $80 million in Q4 2022 from the same period the year before.
Management has forecast revenue of $450 million to $500 million for the 2023 fiscal year.
In the short term, the stock price has fallen from a high of $26 in December 2020 to $15.26 on April 18. Its market cap is $6.4 billion, and the company reported a loss in fiscal 2022 of $132 million.
Most electric vehicles rely on rechargeable batteries. Livent Corp. (LTHM:NYSE), a lithium battery maker, is positioned to grow as more EV companies continue to expand. In 2021, Livent announced a $316 million deal to supply lithium to BMW.
Livent faces a significant exposure to a key commodity: lithium. According to Trading Economics, lithium prices have already increased over 200% in 2022.
Livent has a market cap of $3.8 billion and reported a profit of $0.6 million in 2021, up from a loss of $16.3 million in 2020. It has a price-to-sales ratio of 10.12.
Based in California, Fisker Inc.'s (FSR:NYSE) brand is defined by its chief executive officer, Henrik Fisker, to a significant degree.
But pricing strategy sets the companies apart. While Tesla has focused on higher-end vehicles like the Model S, Fisker is making waves with its 2023 Ocean SUV priced under $40,000, which is why you may want to give Fisker a closer look.
The stock price has dropped significantly from its high of $28.50 in February 2021 to $11.81 April 18. So far, the company has emphasized its reservations rather than sales.
To date, the company has only sold a few thousand vehicles. It remains to be seen if the business can successfully scale up production.
Fisker's market cap is $3.7 billion, and it has a price-to-sales ratio of 32. The company reported a loss of $471 million in 2021 and a loss of $130 million in 2020.
With more than 800 charging stations in the United States, EVgo Inc. (EVGO:NASDAQ) is getting closer to achieving profitability. In Q3 2021, the business added 36,000 customers to an overall total of 310,000 customers. It has a market share of about 13% of the U.S. electric vehicle market.
Interestingly, 10% of EVGO revenue in Q3 2021 came from regulatory credits. Significant reliance on government credits or subsidies may expose EVgo and other EV stocks to political risk in the future.
Its market cap is $3.4 billion, and it reported a loss of $11 million for the nine months ending September 2021. It's price-to-sales ratio is 34.28.
Blink Charging Co. (BLNK:NASDAQ) is a smaller company that competes in the electric vehicle charging market. The business is also aggressively investing in expansion, including the acquisition of Blue Corner, an EV charging company based in Belgium.
The business model is somewhat resistant to competition as the company owns a significant number of its charging stations outright. In addition, Blink is starting to add other revenue streams, such as advertising.
Blink's market cap is $1 billion, and it reported a net loss of $55 million in 2021, vs. a $17 million loss in 2020. Its price-to-sales ratio is 61.39.
Workhorse Group Inc. (WKHS:NASDAQ), headquartered in Ohio, is an EV company focused on the truck market. The company owes its origins to General Motors, which sold its Lordstown, Ohio, EV plant to Workhorse in 2019. In contrast to Tesla and Li Auto, Workhorse is best understood as a play on the growing last mile delivery market.
In the past year, the company has suffered a few setbacks. In September 2021, Workhorse had to recall C-1000 vehicles. In addition, the company unsuccessfully contested the United States Postal Service’s decision to award a $6 billion vehicle contract to Oshkosh.
The company reported a loss of $401 million in 2021 after a profit of $69 million in 2021. Its market cap is $670 million, and its price-to-sales ratio is 226.
Daymak International Inc. does not expect to go public until July. It bills itself as the largest light electric vehicle (LEV) distributor in Canada and said it received more than $50 million in orders for vehicles after initializing pre-sales last month.
Daymak's flagship EV is expected to be on the streets in 2023. The Spiritus, is a "three-wheel, two-seat EV which handles like a go-kart, offers quick acceleration of 60 mph time of 1.8 seconds," the company stated.
The car will feature the Daymak Nebula Platform, which will allow the car to mine and manage cryptocurrency, enabling it to "continuously make money for its owner."
Daymak said the system has been installed in a prototype vehicle, and you can check its crypto mining progress in real time at freecryptocar.com.
Next Tesla Still Out There?
The EV opportunity is significant and poised to grow to $823 billion by 2028.
The number of electric cars hit 10 million worldwide in 2020, according to the International Energy Agency, with China leading the charge with 4.5 million EVs.
They are "gradually becoming more competitive in some countries on a total cost of ownership basis," the agency said.
Companies that scale up production and transition successfully to profitability may eventually overtake Tesla.
|Want to be the first to know about interesting Cobalt / Lithium / Manganese, Technology and Battery Metals investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.||Subscribe|
1) Bruce Harpham and Steve Sobek compiled this article for Streetwise Reports LLC and provide services to Streetwise Reports as an independent contractor/employee, respectively. They or members of their household own securities of the following companies mentioned in the article: None. They or members of their household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Tesla Inc., a company mentioned in this article.