The electric vehicle industry has been a riches-to-rags story in 2022. Many EV stocks soared in 2021 on the expectation that the Biden administration would prioritize the electrification of the auto industry. That happened. But so did inflation. And that took the air out of the second EV bubble burst before it could really get started.
But there’s reason to believe that the third time may be a charm. While inflation is likely to be around for some time, it’s giving manufacturers time to whet consumer appetite while there’s no pressure to have vehicles available for delivery.
But that situation appears to be changing as many companies are starting to deliver vehicles. And as supply chain issues ease, the outlook for 2023 and beyond is becoming supercharged. Like many sectors, however, it’s important to focus on best-in-class stocks. And that’s the focus of this presentation. Here are seven no-brainer EV stocks ready to give your portfolio a jolt in 2023 and beyond.
When I started writing about Tesla (NASDAQ:TSLA), I often noted that investors valued it as a technology stock rather than an electric vehicle stock. That was back when TSLA stock was flirting with the $1,000 level. And the valuation of Tesla was called into question, as was its ability to deliver vehicles.
A couple of years and a stock split later, Tesla is nowhere near $1,000, but the company is undoubtedly delivering vehicles. But the question of valuation still remains.
And some of that has to do with Tesla founder and CEO Elon Musk. The owner recently sold $4 billion worth of his TSLA shares to help pay for Twitter, his latest new project. That has some shareholders concerned about Musk’s focus on Tesla at a time when the stock is at a two-year low.
But chances are, Musk will prove over time that he can walk and chew gum simultaneously. Cathie Wood seems to agree. And that’s why Tesla remains one of the no-brainer EV stocks to own for the next EV revolution.
Nio (NYSE:NIO) also belongs on the list of no-brainer EV stocks. But, like Tesla, I didn’t feel that way during the last EV bubble. The China-based company almost didn’t take place in that rally. At one time, Nio was a penny stock with more than a little risk of going bankrupt.
But that was several years ago. Nio got the financing it needed and shortly thereafter began delivering vehicles in China. And the company also addressed a key pain point for EV owners with its Battery-as-a-Service program.
Like many Chinese stocks, Nio has had to navigate the country’s continuing pandemic restrictions. And the stock is down more than 65% since the beginning of 2022. However, Nio recently announced that deliveries were up more than 29% on a year-over-year basis. The company also has aggressive expansion plans in Europe.
Plus, Nio is in a far better financial position. The company has over $8 billion of cash on hand, which means it will have the capital to continue developing new products.
Ford (NYSE:F) was the first of the major U.S. automakers to go all-in on electrification. But that transition was not without some pain for shareholders.
To its credit, the company stayed the course. And institutional investors are becoming more bullish on Ford’s ability to transition to a company that will primarily make electric vehicles.
For now, that appears to be a good bet. Ford says it has secured the annual battery-cell capacity that it needs to meet its goal of selling 600,000 EVs in 2023. The company has broader plans to manufacture two million vehicles annually by 2026. Of course, inflation is affecting those plans, and Ford is paying over $1 billion in additional supplier costs in the current quarter.
That suggests that investors with patience and a risk appetite consider F stock which, as of this writing, has a P/E ratio of 6.45x.
General Motors (GM)
General Motors (NYSE:GM) was not the first automaker to embrace electrification. But it’s making up for the lost time. While not on the same pace as its rival, Ford, the company still has ambitious plans. By the end of 2024, GM plans on selling 400,000 EVs in the United States; and one million by the end of 2025. For reference, the company is on track to sell 44,000 EVs in 2022.
Like Ford, General Motors targets a mass market for its electric vehicles. In that regard, the company is leaving the premium space for companies like Tesla. And it may serve the company very well, with inflation likely to be elevated well into 2023.
On the other hand, the company also plans to launch GM Energy, a new business unit that is designed to better position the company against Tesla. This will include two new versions of the company’s Ultium Charge 360 public charging service.
GM has a P/E ratio of 6.7x, which makes it a very attractive choice among growth stocks.
Lucid Group (LCID)
The last car company on this list of no-brainer EV stocks is Lucid Group (NASDAQ:LCID). The company began publicly trading in 2021 by way of a special purpose acquisition company (SPAC). Many SPAC companies became meme stocks and are trading for pennies on the dollar today.
That alone should make Lucid Motors stand out. But the company is beginning to deliver on its promises. For example, unlike many startup EV companies, Lucid is delivering vehicles.
Investors will need to be cautious and patient. Like all EV makers, Lucid faces supply chain issues. However, unlike legacy automakers, Lucid will have to raise capital in an environment of rising interest rates. On the other hand, having supply issues (which are likely to be transitory) is different from demand issues.
That makes LCID stock a long-term play. But the company has already bucked some long odds. With cars already in production and more models on the way, Lucid is one to watch closely.
Albemarle has projects worldwide, and based on the company’s recent earnings reports; demand is booming. The key is the company’s ability to mine lithium. For the fourth straight quarter, Albemarle reported record revenues, and this time it crossed the $2 billion mark for the first time. The company also reported three straight quarters of record earnings.
Not surprisingly, several analysts have been increasing their price targets for ALB stock since its most recent earnings report. Add to that the company pays a respectable dividend which doesn’t have a particularly compelling yield (it’s just 0.49% as of this writing). But it pays out $1.58 on an annual basis, and it’s been growing for 28 years.
The last stock that makes this list will play an essential role in the mass adoption of electric vehicles. ChargePoint (NYSE:CHPT) is another SPAC stock on this list. But it has massive growth potential.
If you’re unfamiliar with ChargePoint, the company is responsible for building out the public charging infrastructure necessary to ease consumer concerns about the range of their EV batteries. In fact, ChargePoint should be one of the largest beneficiaries of the Inflation Reduction Act that passed Congress in 2022.
ChargePoint is not alone in the space; rather, they are the leader. And so, if you’re looking for no-brainer EV stocks to own for 2023 and beyond, CHPT stock makes sense. Especially if you can start a position now while the company is in the pre-earnings stage.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.