Stock Market

Don’t Just Sit Back While EV Stocks Break Out This Year

Source: Ilija Erceg / Shutterstock

[Editor’s note: “Don’t Just Sit Back While EV Stocks Break Out This Year” was previously published in January 2022. It has since been updated to include the most relevant information available.]

Electric vehicles are taking over the world. You know it. I know it. The market knows it.

Consumers want to drive electric vehicles these days. Indeed, 60% of today’s prospective car buyers want to buy an EV. Lawmakers want you to drive an EV, too. More than 200 cities across the world have a “100% clean energy” target for 2030, 2040, and 2050.

Plus, these cars are driving farther, lasting longer, getting cheaper, and becoming much, much more accessible. Oh, and not to mention, every auto maker from Ford (F) to Jeep to Rolls-Royce (RYCEY) is launching new EVs.

So, I repeat: Electric vehicles are taking over the world.

This isn’t something that will happen tomorrow or over the next few years. It’s happening right now.

In Q1 of 2022, Tesla (TSLA) delivered a record-high 310,048 vehicles. Chinese EV maker NIO (NIO) delivered 25,059 vehicles in Q2 of 2022, increasing by 14.4% year-over-year. And amid soaring fuel prices, U.K. electric car inquiries have recently hit record highs.

Indeed, about 10% of all new car sales in 2021 were EVs. That’s up from about 5% in 2020 and 3.5% in 2019. Back in 2016, that number stood at just 0.3%.

In other words, in just five years, we’ve gone from 0.3% global EV penetration to 10%. That’s huge growth – and things are just getting started.

Thanks to shifting demand and legislation, as well as increasing supply, improving technology and falling costs, we predict that the EV penetration rate will soar toward 80% by 2040. That implies EV volume growth of ~2,000% over the next 20 years.

With so much growth potential over the next two decades, the EV industry offers investors multiple excellent long-term investment opportunities.

And the time to go “all in” with EV stocks is right now.

Pile Into EV Stocks

Thanks to external macroeconomic noise related to inflation, the Fed, Treasury yields, and issues with the global supply chain, EV stocks have struggled for a while.

But take a look at the largest EV companies by market cap right now. You have Tesla, Li Auto (LI), Lucid (LCID), NIO, Rivian (RIVN), XPeng (XPEV) and Polestar (PSNY).

And if you don’t own them already, then the time to buy is now. 2022 and beyond will be a breakout era for EV stocks.

The supply chain shortages that have impacted EV production has begun to ease, as COVID-19’s manufacturing impacts become less severe.

Meanwhile, a ton of new EVs are coming to market.

Lucid is on track to deliver thousands of its ultra-premium Lucid Air this year. It has over 30,000 reservations, reflecting $2.9 billion in potential sales. NIO is expanding into Europe. The Fisker (FSR) Ocean is expected to hit the market in late 2022. BMW and Audi are launching a whole new fleet of premium EVs in 2022. Rivian’s making waves with its pickup truck and Amazon (AMZN) partnership. And Canoo (GOEV) just announced its own partnership with retail titan Walmart (WMT).

The Final Word

There’s a lot on the EV docket in 2022.

And that’s why we’re pounding the table about EV stocks right now. We think investors have a generational opportunity to buy high-quality EV stocks at a huge discount before they go on a huge run in 2022-plus.

Alas, the million-dollar question is: Which EV stocks should you buy?

For that, let’s shift focus to the methods behind Hypergrowth Investing. We invest in the world’s most innovative companies, disruptive megatrends, and breakthrough technologies.

Of course, EVs perfectly fit that description. But we aren’t going out and buying every EV stock out there. Indeed, we think most electric vehicle companies will fail because the industry cannot support dozens of winners.

Instead, we’re buying the highest-quality EV stocks with the biggest chance for long-term success. And we’re scoring our subscribers 100%-, 200%-, and 300%-plus returns.

Find out which EV stocks are on our “buy radar” today.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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