Top Electric Car Stocks

BLNK, TSLA, AND PLUG lead the industry in growing revenue

Dynasty Electric Car Corporation IT Sedan
Dynasty Electric Car Corporation IT Sedan. © Dynasty Electric Car Corporation

Top performing electric car companies include Blink Charging Co., Tesla Inc., and Plug Power Inc. which are leading their peers in revenue growth as rising interest rates and pandemic restrictions have slowed demand globally, including in China, the world's largest EV market. A key benchmark, the KraneShares Electric Vehicle and Future Mobility ETF (KARS), has plunged by 31%, almost twice the drop of the Russell 1000 Index.

We look at the top three electric car stocks in three categories: the best value, the fastest growth, and the best performance. The data is all from Dec. 7, 2022.

Best-Value Electric Car Stocks

These are the electric car stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can serve as a rough measure of a business's value. A business with higher sales could eventually produce more profit when it achieves (or returns to) profitability. The price-to-sales ratio shows how much you're paying for the stock for each dollar of sales generated.

Best-Value Electric Car Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/S Ratio
XPeng Inc. (XPEV) 11.82 10.1 2.2
NIO Inc. (NIO) 13.41 22.4 3.3
Li Auto Inc. (LI) 24.10 23.5 4.1

Source: YCharts

  • XPeng Inc. is a Chinese company that designs and manufactures smart EVs that are equipped with autonomous driving technology and intelligent operating systems. The company also provides supercharging, maintenance, and vehicle leasing services. XPeng delivered 5,811 vehicles in November as year-to-date vehicle deliveries climbed a third year-over-year to over 109,000.
  • NIO Inc. is a Chinese company that makes smart and connected EVs equipped with assisted-driving features. The company also provides vehicle-charging equipment.
  • Li Auto, a Chinese developer and manufacturer of smart EVs, sells the Li ONE, a electric sport utility vehicle (SUV), its main product. The company also sells charging stalls and internet connection services for vehicles. Li Auto announced on Dec. 9 that president and director Yanan Shen will resign on Jan 1, 2023, to be replaced by chief engineer Donghui Ma.

Fastest Growing Electric Car Stocks

These are the electric car stocks with the highest YOY sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means and find growing companies that have not yet reached profitability. In addition, accounting factors that may not reflect the overall strength of the business can significantly influence earnings per share.

However, sales growth also can be potentially misleading for gauging the strength of a business because growing sales for money-losing businesses can be harmful if the company has no plan to reach profitability.

Fastest Growing Electric Car Stocks
  Price ($) Market Cap ($B) Revenue Growth (%)
Blink Charging Co. (BLNK) 13.22 0.7 170.4
Tesla Inc. (TSLA) 173.44 0.5 56.0
Plug Power Inc. (PLUG) 13.78 8.0 31.1

Source: YCharts

  • Blink Charging Co. owns and operates EV charging equipment and a network of charging stations managed by its proprietary cloud-based software, serving residential consumers, building owners, parking garages, sporting venues, and other public areas. Blink said on Nov. 8 that third-quarter net losses widened to $26 million while revenue nearly tripled, driven by strong growth in service and product revenues.
  • Tesla Inc., the world's largest automaker by market value, is primarily engaged in the design and manufacture of electric cars, SUVs, and trucks, as well as EV powertrain components. The automaker also manufactures and installs solar energy generation and energy storage products.
  • Plug Power Inc. is a green hydrogen company focused on the end-to-end production of hydrogen fuel cell systems that power electric motors. Plug Power produces zero-emission products for the electric supply chain, such as electric vehicles and data centers. Plug Power said gross losses widened in its latest quarter while revenue climbed nearly a third to $189 million, aided by growth in sales of fuel cells and related equipment.

Electric Car Stocks With the Best Performance

These are the electric car stocks that had the smallest declines in total return over the past 12 months out of the companies we looked at.

Electric Car Stocks With the Best Performance
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Li Auto Inc. (LI) 24.10 23.5 -23.7
Tesla Inc. (TSLA) 173.44 547.7 -51.3
Hyliion Holdings Corp. (HYLN) 2.79 0.5 -57.5
Russell 1000 N/A N/A -15.6
KraneShares Electric Vehicle and Future Mobility ETF (KARS) N/A N/A -30.9

Source: YCharts

  • Li Auto Inc.: See above for company description.
  • Tesla Inc.: See above for company description.
  • Hyliion Holdings Corp. sells electrified powertrain components for commercial vehicles through subsidiaries. Hyliion in November completed the acquisition of the KARNO generator technology from GE Additive for $15 million in cash and $16 million in stock. The KARNO technology is expected to be 20% more efficient that conventional generators. Hyliion says KARNO will be integral to its Hypertruck powertrain platform.

Advantages of Electric Car Stocks

There are many advantages to investing in electric vehicle stocks. Since the 2020 presidential election, electric vehicle stocks have gained. They are expected to create over 1 million jobs. If U.S.-made electricity is included in the clean energy industry, that also could benefit electric vehicle companies. And the possibility of tax credits and other loan options could encourage more investors to enter the sector. 

The future for electric vehicles and electric car stocks looks promising. In just about a decade, one out of five cars sold is expected to be electric, while by 2030, electric vehicles will comprise about half of the car sales. Electric vehicles support both technological advancement and concerns about pollution.

Investors who wish to diversify can look for exchange-traded funds (ETFs) that invest in a range of electric vehicle stocks to benefit from a range of electric car industry developments. These types of funds can help minimize risk and provide exposure to a fast-growing sector. For example, the iShares Self-Driving EV and Tech ETF (IDRV) has exposure to various industries, such as electric vehicles and information technology. It also has a mix of auto and tech stocks. Some of IDRV's top holdings are Tesla, Apple (AAPL), and Toyota (TM).

Analyzing Electric Car Stocks

The electric car market is expected to grow at a compound annual rate (CAGR) of 25.6% from 2019 to 2026. But determining the fundamental strength of electric car stocks should also be attempted. Investors must take market capitalization, sales and earnings growth, cash flow, and cost of production into account before investing in this sector. Also, electric car manufacturing involves the use of cutting-edge technology, so investors must consider the ability of electric car companies to meet such technological standards.

Finding the top electric car stocks to buy should stretch beyond stocks of the automobile manufacturers like front-runner Tesla. Investors should also seek out and analyze stocks of the companies that make electronic safety equipment, connector systems, batteries, and other components of electric vehicles.

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