Top Electric Car Stocks for Q4 2022

XPEV, BLNK, and TSLA are top for value, growth, and performance, respectively

The electric auto industry is composed of companies focused on the manufacture of electric cars, trucks, vans, and commercial vehicles, as well as companies that offer electric automobile parts and services. Though some traditional automakers also produce electric vehicles (EVs), this article focuses on companies considered to be largely pure-play EV manufacturers. The electric car industry is young and growing quickly. Tesla Inc. is one of the more familiar names, but there are others, such as Workhorse Group Inc. and Arcimoto Inc.

Inflation and rising interest rates are creating a difficult operating environment for EV manufacturers. Widespread shortages are pushing up the costs of raw materials, which is weighing on earnings. Higher interest rates are making the cost of capital more expensive for an industry that is highly capital-intensive.

Electric car stocks, represented by the KraneShares Electric Vehicle and Future Mobility ETF (KARS), have performed on par with the broader market over the past year. KARS has provided a total return of -13.2% over the past 12 months, not too far below the Russell 1000's total return of -7.1%. These market-performance numbers and all statistics in the tables below are as of Aug. 5, 2022.

Below, we look at the top three electric car stocks with the best value, the fastest growth, and the best performance, respectively.

Inflation Reduction Act

On Aug. 7, 2022, the Senate passed the Inflation Reduction Act, and it was later passed by the House and signed into law by President Joe Biden on Aug. 16, 2022. It includes:

  • More than $300 billion for clean energy programs
  • 40% reduction in carbon emissions by 2030
  • Electric vehicle owners will receive tax credits

The act is the largest federal investment in clean energy in the history of the U.S. EVs may become more affordable for consumers with this tax credit. In addition, the labor market in the clean energy sector will get a boost in jobs.

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) 23.33 19.9 4.9
NIO Inc. (NIO) 20.22 33.8 5.4
Li Auto Inc. (LI) 33.63 32.5 6.3

Source: YCharts

  • XPeng Inc.: XPeng is a China-based company that designs and manufactures smart EVs. Its vehicles are equipped with autonomous driving technology and intelligent operating systems. The company also provides a range of related services, such as supercharging, maintenance, and vehicle leasing services. XPeng announced in early June its vehicle delivery results for May 2022. The company delivered a total of 10,125 smart EVs in May 2022, reflecting a 78% increase compared with the same period a year ago.
  • NIO Inc.: NIO is a China-based manufacturer of smart and connected EVs. Its vehicles are equipped with assisted-driving features. The company also provides vehicle-charging equipment. NIO recently announced financial results for Q1 of its 2022 fiscal year (FY), the three-month period ended March 31, 2022. The company's net loss nearly quadrupled to $281.2 million despite revenue growth of 24.2% compared with the year-ago quarter. NIO's cost of sales and operating expenses grew at a faster pace than revenue, contributing to the wider net loss for the quarter.
  • Li Auto Inc.: Li Auto is a China-based developer and manufacturer of smart EVs. Its main product is the Li ONE, a smart electric sport utility vehicle (SUV). The company also sells peripheral products and related services, including charging stalls and internet connection services for vehicles.

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) 23.03 0.9 339.1
Li Auto Inc. (LI) 33.63 32.5 173.0
XPeng Inc. (XPEV) 23.33 19.9 157.9

Source: YCharts

  • Blink Charging Co.: Blink Charging owns and operates EV charging equipment and a network of charging stations managed by its proprietary cloud-based software. The company serves residential consumers as well as building owners, parking garages, municipalities, sporting venues, and other public areas. Blink Charging recently announced that it has agreed to acquire SemaConnect Inc., a provider of EV charging infrastructure solutions in North America, for around $200 million. The company did not provide an expected closing date for the transaction.
  • Li Auto Inc.: See above for company description.
  • XPeng Inc.: See above for company description.

Electric Car Stocks With the Best Performance

These are the electric car stocks that had the best returns or 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 (%)
Tesla Inc. (TSLA) 864.51 903.0 20.97
Li Auto Inc. (LI) 33.63 32.5 7.27
Plug Power Inc. (PLUG) 25.19 14.6 -3.12
Russell 1000 N/A N/A -7.1
KraneShares Electric Vehicle and Future Mobility ETF (KARS) N/A N/A -13.2

Source: YCharts

  • Tesla Inc.: Tesla, 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. Tesla shareholders at its Aug. 4, 2022, annual meeting approved a 3-for-1 stock split of the company's common shares outstanding. Tesla's stock price will be adjusted lower after the stock split, which would make the stock more affordable to a wider range of investors.
  • Li Auto Inc.: See above for company description.
  • Plug Power Inc.: Plug Power 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.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources
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  1. The Wall Street Journal. "EV Stocks Face a Long Road to Redemption."

  2. YCharts. "Financial Data."

  3. Senate Democratic Leadership. "Summary of the Energy Security and Climate Change Investments in the Inflation Reduction Act of 2022."

  4. XPeng Inc. "XPeng Announces Vehicle Delivery Results for May 2022."

  5. NIO Inc. "NIO Inc. Reports Unaudited First Quarter 2022 Financial Results."

  6. Li Auto. "Investors Overview - Li Auto Inc."

  7. Blink Charging Co. "Blink Charging Announces the Transformative Acquisition of EV Charging Leader SemaConnect, Further Expanding Its Network and Capabilities."

  8. Bloomberg. "Tesla Files to Split Shares 3-for-1 as Investors Bail on Stock."

  9. Tesla Inc. "Schedule 14A Information."

  10. Plug Power Inc. "About Plug Power."

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