Today we focus on one of the most talked about industry - Electric Vehicles (EV). We cover not only electric car companies worth investing into but also the companies that are providing the battery technology, the required materials and commodities, charging infrastructure and autonomous technology. [Click on the stock names for more info & price chart]
Ford Motor Co (F)| Nasdaq|USD19.50|12th November Closing| Medium to Long Term Investment
First on our list is not TESLA but Ford; one of America's top car & truck companies who recently has made a massive commitment towards EV. Ford has committed USD30 billion in investment by 2025 towards EV and expects 40% of its global sales to be electric vehicles by 2030. It has already received 150000 units booking for its F-150 Lightning truck which will be fully electric and is expected to launch 16 electric car models in 2022. Given that Ford has a more reasonable PE ratio compared to many other EV companies who are yet to be profitable, makes this stock is one our favourites for long term investments.
Magna International Inc ( MGA)|Nasdaq|USD86.43|12th November Closing|Medium to Long Term Investment
This mobility technology company is making many components for the EV industry lately. Magna Provides powertrains, exteriors & structures, aerodynamic solutions and even complete vehicle manufacturing for EV and Non EV clients. It currently provides components for the Chevy Bolt EV and will make battery enclosures for GM's Hummer electric truck, due in late 2021. It already makes e-drive gearboxes for Nio and Xpeng. Magna also will make the Fisker Ocean SUV, due out late next year. This is a profitable company with PE just above 14 and therefore is a good investment option in this industry which is growing exponentially.
NIO Inc (NIO)|Nasdaq|USD42.67|12th November Closing|Medium to Long Term Investment
This Chinese EV company which is listed on the Nasdaq has seen a meteoric rise since mid 2020 with stock price soaring over 700% in this period. Although they are facing delivery challenges due the chip shortages, the demand for their cars continues to grow at record pace. Goldman Sachs has upgraded this stock from Hold to Buy with a USD56.00 price target; 33% above the current price. Although this will take several quarters to materialise. In recent weeks this stock has been trading between USD36.00-39.00 which is a good entry level for NIO.
Quantumscape Corp (QS)|Nasdaq|USD38.81|12th November Closing| Long Term Investment
QS is a battery technology company for the EV industry. It is working on a proprietary technology using solid state Lithium-Metal batteries which are reported to be safer. The company's backers are Volkswagen Motors and Bill Gates. Although the company is at least 2 years away from commercial production of its batteries, significant improvements and milestones have been reached, bringing it closer to commercialisation. Please note that this is a long term investment and requires a bigger risk appetite. Investors may be stuck in for over 1 year to see significant gains. However, once the company gets close to the final milestone, investors may be looking at over 100% gains in stock price.
ChargePoint Holdings Inc(CHPT)|Nasdaq|USD26.82|12th November Closing|Medium to Long Term Investment
ChargePoint has the largest network of EV charging stations in the US. There are currently 45000 stations in the US with 26000 station belonging to ChargePoint. Furthermore, President Joe Biden has set an ambitious target to have half of all new vehicle sales in 2030 be electrical vehicles. His infrastructure bill provides for a $7.5 billion investment in EV charging infrastructure over five years. The company's largest revenue stream is in hardware sales and it has a growing subscription based business for its software & services. ChargePoint is primed for a massive growth trajectory over the next 5 years. The share price is currently trading significantly below its 6 month high of USD35.70
Global X Lithium & Battery Tech ETF(LIT)|Nasdaq|USD95.80|12th November Closing|Medium to Long Term Investment
LIT is an ETF that incorporates battery technology companies in its fund which includes Tesla, BYD of China and lithium mining companies. Over the last 12 months this ETF has soared from USD55.00 to USD95.00 in tandem with the growth in the EV market. This is one way for passive investors to get exposure in the EV battery technology sector without needing to monitor the day to day movement in various EV stocks.
KraneShares Electric Vehicles & Future Mobility Index ETF(KARS) |Nasdaq|USD54.43| Medium to Long Term Investment
KARS is another ETF option that tracks stocks involved in making electric cars (including Tesla, NIA, Ford, Xpeng, Daimler), battery technology (like CATL), autonomous driving technology, lithium and copper mining, and hydrogen fuel cells. The top ten stocks include Tesla, the largest holding at nearly 7% of the fund, Daimler, NIO, General Motors, Ford, and Xpeng. The fund is fairly diversified with 42% of its holdings in China based companies and 27% US based.