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A major shift is happening in the automobile industry as the emergence and uptake of Electric Vehicle gains momentum. This shift is creating opportunities in an industry that was non-existent a few years ago.
New startups are emerging every day to get a niche in the new market. Hence, it is key to identify companies with high potential EV stock.
With this push, some companies have gained an early lead in the race. This lead is expected to continue as more consumers embrace electric vehicles
It is in every investor’s interest to identify those opportunities with the highest future value potential. This article will focus on the top three EV stocks with the promise of better future returns. This is based on the below factors.
- Market performance
- Market share
- Government support
Tesla is the largest Electric Vehicle maker in the world today. Valued at $600 Billion, its size dwarfs even the traditional car manufacturers that have led the industry for decades. Founded by the famous entrepreneur Elon Musk, it started operations in the year 2003. Since then, the company has been facing years of success both in sales volumes and investors gain.
Below is a price chart of the Tesla stock in the last few months.
Tesla accounts for close to 30% of the electric vehicles market share. In the year 2020, Tesla sales topped 500 Thousand cars. Some of their most famous brands include; Model S Model X and Model 3
As the market leader, Tesla continuous to invest in supporting infrastructure including battery production and charging points. These are crucial elements that support the use and development of electric vehicles.
There is also a huge investment going towards achieving autonomous driving vehicles. This revolutionary innovation will make driving easier and safer.
The American market is among the top three biggest automobile markets in the world. As an American company, Tesla is the market leader. This gives it benefits associated with market leadership.
Recently, there have been government actions towards supporting the rollout of electric vehicles. These include the development of supporting infrastructure and tax breaks.
These actions will assist grow the industry with Tesla leading the journey. Hence, these factors make Tesla’s stock among the top to invest in.
In every success story, there is always a controversial side to it. Tesla is not different. The company has been facing challenges regarding its autonomous driving and battery safety.
There have been a few crashes while autonomous driving. Cases of fires from the electrics failure have also been reported. Though challenges exist, I believe they will be rectified eventually.
II. NIO Inc
Headquartered in Shanghai China, NIO Inc is one of the leading EV manufacturers globally. After commencing operations in 2014, NIO continues to grow in terms of products and revenue. In 2020, NIO doubled its sales compared to the previous year.
The story of NIO is a mixture of success and challenges. In February 2020, NIO received a $1.4 billion bailout from the Hefei government after it ran out of operating capital.
China is the largest market EV market globally. As a Chinese company, NIO is well placed to take a huge chunk of this market. Achieving this will make NIO among the biggest Electric Vehicle companies globally. It is estimated that by 2030, 90% of all vehicles sold in China will be electric.
These factors position NIO Stock as a lucrative investment option. The bailout by the Chinese government is an indicator there is hope and expectation the company will continue to excel in the future.
Battery Swapping Technology
Battery swapping is a key innovation driving NIO’s growth. Charging batteries has always been a challenge for EVS’. This is because of the inadequate infrastructure of charging terminals.
It also takes a lot of time to charge the batteries. To address some of these issues, NIO has introduced the concept of battery swapping.
NIO is building swapping stations where drivers can visit and get batteries changed faster. Batteries will always remain key components in the growth of the Electric Vehicle market. Hence, any investment and innovation in this area make the band more popular and lucrative.
NIO Europe Entry
Unlike its competitor Tesla, NIO has largely operated in China. However, this is changing. Later his year, it plans to launch its first overseas plant in Norway Europe. This is an indication the company is setting its sight on the global market.
Access to the global market will assist grow NIO sales. These factors give NIO stock high chances of growth going forward.
NIO STOCK CHART
The above chart indicates a strong price gain in the last year. The stock is on a bullish momentum and this could continue.
III. LUCID MOTORS
Founded in 2007, Lucid motors is an Electric Vehicle company based in California. The company was initially known as ATIEVA.
It was primarily focusing on producing batteries and other assorted hardware’s for the EV producing companies. However, in 2016, the company decided to start producing EV cars. The first car is expected to roll out later this year.
Being in electric car parts production, Lucid has enough experience in the industry. This is one factor likely to propel to success in an industry that is still growing.
The ability to produce their cars and batteries gives them an edge in the market. This makes it easier for the company to enjoy benefits associated with economies of scale. A key ingredient in succeeding in a very competitive market.
The United States is the biggest global economy and hence a key market for electric vehicle makers. However, the penetration of EV remains below 10%. This makes it lucrative as there is huge growth potential to be tapped.
As an American company, Lucid Motors has huge chances of success by just operating locally. A combination of these factors with government support makes the company lucrative to invest in.
The EV industry is young but growing fast. There is a growing push both by the activists and government in favor of electric vehicles. This is because they use cleaner energy compared to traditional cars. This will accelerate the development and acceptability of these products.
Most analysts predict a steep uptake growth of EV cars in the days ahead. Efforts are been made to have the infrastructure and necessary supporting services ready to handle this shift.
These companies have the potential to offer some of the highest returns in this industry. You can never be 100 % about the future. However, based on the current status quo, they will maintain market leadership.