Concerns about pollution are developing quickly and with them the interest in reducing carbon emissions. This is why electric vehicles are increasing in popularity. Electric cars are better for the environment because they produce fewer air pollutants and greenhouse gasses than diesel or a petrol car. With increasing popularity, interest of investors on how to invest in electric vehicle stocks is increasing.
Even though electric vehicles are in demand, many still ask ‘How green electric cars are?’. The concerns range from how electricity is generated to the process of manufacturing. The main benefit of electric cars is that there are no tailpipes. With no tailpipe, there is no carbon emission. This alone reduces pollution greatly. Theoretically speaking, one electric car out there saves 1.5 million grams of carbon dioxide. Which in turn crisingreates a more pleasant place for pedestrians and cyclists.
Electric cars are also beneficial when it comes to reducing noise. They are generally quieter than regular vehicles. If more people turned to an electric alternative the environment would have been much cleaner and peaceful. Especially in areas where the speed is generally low.
Investing in electric vehicle stocks
Investing in electric vehicle stocks is a hot topic among investors. Many feel like they missed out on the potential of electric vehicle technology due to the meteoric rise of Tesla. Tesla’s value is estimated to be over $807.83 billion at the time of writing, while that of its closest competitors is $104.49 billion.
According to Statista, in 2020, Tesla produced 499,000 units while Volkswagen’s total was 10.8 million. This shows that despite producing just 4.8% of the cars sold in 2020, Tesla still commands a higher share price. To be equal with Tesla, the share price of Volkswagen would need to rise 676%.
What makes Tesla a game-changer? The simple answer is that they don’t use oil. They use batteries. However, it is highly unlikely Tesla will be given a free ride by other automakers.
Lithium-ion batteries are the most commonly used type of battery in EVs today. Even though the development is increasing at a fast pace, concerns about range and charging time are also increasing.
Solid-state batteries are considered the holy grail of green energy. Currently, traditional automakers are heavily investing in this area. One such company is QuantumScape, which is developing them in the US. Some of the major investors in QuantumScape are Bill Gates and Volkswagen. It has been revealed that its batteries can charge to 80% of their full potential within 15 minutes. They should also last for around 12 years in normal use. Several top executives from Volkswagen Group who are also on the board of directors of QuantumScape are looking to use their batteries in their electric vehicles starting from 2025.
Although solid-state batteries are still years away from becoming a reality, their potential is immense. If we can successfully overcome the various obstacles that we face in the way of their development, then we should be able to implement their solutions sooner rather than later.
Through the lessons learned from Covid-19, we realized that when faced with a difficult challenge we can rapidly find solutions. If we observed solid-state batteries as a priority as high as Covid-19 then we would be confident to eventually reach this goal.
While some investors might think that there are only a few companies that can make it big in this field, in reality, many will likely succeed. Just as many companies can make a successful vaccine, many companies can make a successful battery-based product.
Those investing in electric vehicle stocks have an important role to play in the development of electric vehicles (EVs). As long as the technology is moving forward, batteries are part of the future.
What are electric vehicles?
An electric vehicle is a type of vehicle that uses multiple electric motors and/or traction wheels for propulsion. It can be powered by a system of off-vehicle sources or self-contained with solar panels, fuel cells, or a battery.
An electric vehicle is a type of vehicle that uses a fuel cell to generate electricity. It can be used in various forms such as cars, buses, and trains.
The introduction of electric vehicles (EVs) dates back to the mid-19th century. At that time, electricity was considered the preferred method of propulsion for motor vehicles. In most cases, internal combustion engines are the main propulsion system for vehicles that have been around for over 100 years. However, electric power has become more prevalent in other vehicle types. Generally, the term electric vehicle is used to refer to a car that uses a rechargeable battery. In the 21st Century, EVs have gained widespread acceptance due to their potential to reduce greenhouse gas emissions and other environmental issues. The evolution of internal combustion engines has dominated the propulsion of motor vehicles for over 100 years. However, electric power has remained relatively prevalent in other vehicle types.
Government agencies in the US and Europe introduced various incentive programs to encourage the adoption of electric vehicles in the late 2000s. This led to a fast-growing market in the following years. According to a pre-COVID 2019 analysis, the number of electric vehicles is expected to grow at a robust rate of 22% in 2030. Much of this growth will be in markets where electric vehicles are already prevalent.
Benefits of electric vehicles to the environment
Around half of London’s air pollution comes from road transport. It’s no wonder that the government and local councils are pushing for more electric cars. The goal is to ban petrol and diesel cars by 2040.
Compared to petrol or diesel cars, electric vehicles are more fuel-efficient and are less expensive to run. The electricity required to charge them is typically 40% lower. A Battery Electric Vehicle has fewer moving parts than a petrol/diesel car. It is more fuel-efficient and is generally cheaper to maintain. On the other hand, all EV batteries eventually become less efficient. It is usually necessary to replace a battery to keep the vehicle running smoothly.
An EV is significantly less harmful to the environment than traditional vehicles when it comes to exhaust emissions. However, it still adds a certain amount of greenhouse gas emissions when it’s charged. If you have a solar-powered vehicle, charging it during the day can help reduce your greenhouse gas emissions. Also, using GreenPower, which is a form of renewable energy, can reduce your electricity consumption.
Better air quality can also help lower costs and improve people’s health in areas with high air pollution.
If electric vehicle charging is managed properly, it will help us create a more stable electricity network demand profile. In addition, this will help us to improve the efficiency of our electricity system. It will also help us to avoid higher-cost charging periods.
Negative side effects of electric vehicles on the environment
Continuous technology development promises a better and cleaner future. However, it is important to produce and implement these new technologies in an environmentally friendly way as well. For example, this awareness applies in the extraction of uranium and rare earths. Just as well, it is crucial to stay eco-friendly in the production of electric vehicles. The study found that using coal to generate electricity led to higher greenhouse gas emissions than producing the same amount of electricity using conventional methods. Electric car factories produced more toxic waste than traditional car factories, the researchers said.
The researchers focused on the life-cycle impacts of electric and conventional vehicles. They discovered that the latter’s life-cycle is significantly longer than previously thought. A report said that the production of electric cars was more environmentally intensive than that of petrol and diesel vehicles. The carbon footprint of electric vehicles is twice as large as that of traditional vehicles. They require a lot of toxic metals such as nickel and copper. Also, their acidification impact is higher than that of traditional car production.
The study shows that electric vehicles are as harmful as traditional internal combustion engines when it comes to air pollution and human toxicity. Professor Stromman noted that while they don’t produce as many direct emissions as combustion engines, they still perform worse on a range of other impacts.
Due to the harmful environmental effects of electric cars, they have already polluted a great deal before they even hit the road, a report found. However, If the cars were powered by low-carbon electricity, they could offer substantial greenhouse gas reductions and lower emissions over time.
In regions where fossil fuels are the primary energy source and electricity is produced from coal, lignite or heavy oil combustion promoting electric cars is counterproductive, the report said.
In Europe, electric cars can offer better environmental performance than internal combustion engines because electricity is produced in many different ways, a study has found. According to the calculations of some carmakers, electric vehicles have a 10% to 24% cut in their global warming potential compared to petrol and diesel vehicles.
History of electric vehicle stocks
An electric vehicle stock has a long history of being on the market. The term electric vehicle stock often refers to a network of companies that make up the market for electric vehicle batteries and charging stations. Tesla is the world’s most popular electric vehicle stock. Like many others, it has seen a massive uptick in interest following the 2020 presidential election. The company’s stock reached an all-time high of $900.40 in February.
While EV manufacturers are enjoying the resurgence of clean driving technology, many others are also cashing in on the opportunity. One example of a rising stock is Plug Power, which has seen its value surge from $14.00 to $24.44 in just over a month.
Benefits of investing in electric vehicle stocks
There are numerous benefits of 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 American-made electricity is included in the clean-energy industry, that could benefit electric vehicle companies. Also, the possibility of tax credits and other loan options could encourage more investors to enter the sector.
Tesla’s stock has grown more than 600% in the past year, making it one of the most valuable companies in the world. Despite the company’s high market value, many investors still believe in its future. On its annual battery day, Tesla showcased a breakthrough design that aims to reduce the cost of electric cars.
Nio, which is China’s leading electric car startup, has seen explosive growth in 2020. Its market cap has also increased more than 1,100% this year. Nio’s sales grew at a fast pace in the second and third quarters, as the company made up for its losses in the first quarter. While the market may have slowed the company’s momentum, it’s still a serious player in the electric car industry.
Nikola is an example of a high-flying EV stock that suddenly took a nosedive after being called out by a short-selling report. Its downfall was mostly because its investors were deceived about the company’s performance. Even though there are mixed sentiments on NKLA’s future, this stock quickly lost its momentum.
Investors who wish to diversify can look for ETFs which invest in a range of electric vehicle stocks. These types of funds can help minimize risk and provide exposure to a fast-growing sector. For example, the IDRV fund 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 (TSLA), Apple (AAPL), and Toyota.
Drawbacks of investing in electric vehicle stocks
The industry still has a long way to go in terms of implementing EV technology. Most of the time, the initial investment for an EV is quite high. Starting at $30,000 or more. Until the technology is widely available to allow consumers to buy an EV, the cost will remain higher than that of a comparable gas-powered vehicle.
The availability of charging stations is also a major obstacle to the growth of the electric vehicle industry. Most of the time, a car’s range is limited to around 60 to 300 miles. Also, it can take up to 20 hours to recharge on lower-end models.
No matter if you’re looking for stocks that are cheap and have good long-term potential or you’re trying to add value to your existing portfolio, remember that volatility can affect both. One can also invest in a clean energy ETF instead of individual stocks. An exchange-traded fund is a type of mutual fund that enables investors to gain exposure to various stocks in the same way that they would with a single share.
Alternatives ways to invest in electric vehicle stocks
The rapid growth of the EV market is expected to create immense opportunities for car companies such as Tesla and Ford. However, one of the best ways to get into the EV revolution is to look at the suppliers. This can offer opportunities for both buyers and manufacturers. Looking at the bigger picture and the industry as a whole could offer more opportunities for investors.
While it’s possible to invest in individual companies, it’s not for everyone. One should carefully consider the risks and rewards of each type of investment.
Let’s start with charging stations. Much like petrol stations, charging stations have benefited from the traditional car boom. They can be a good place to start looking for opportunities in the EV industry. SPACs allow early-stage companies to raise capital through an acquisition without going through the traditional IPO process. One such company is ChargePoint Holdings, which went public in the US less than a year ago. It enables retail investors to acquire early-stage companies.
Another alternative is the electricity that powers the charging stations. It can benefit the same way oil did from petrol. Meaning, a company like National Grid can benefit from the surge of EV’s on the streets.
Experts believe National Grid is set to become a growth stock after acquiring a UK electricity distribution business from PPL. This acquisition will allow the group to increase its share of the country’s electric power grid. As more people choose to charge their EVs, National Grid is well-positioned to take advantage of the increased demand. However, it is still unknown how much the firm will gain from the increased usage.
Ofgem has previously recommended that NG should separate itself from the grid to avoid a conflict of interest. This purchase could help boost the group’s growth prospects, but it would also take some of the limelight away from its already robust growth. The other concern is that the company is carrying out two transactions simultaneously. The group had to borrow heavily to fund the transactions.
Although there are risks to NG’s EV-related growth, there is also cautious optimism with a dividend yield of 5.5%.
Another potential place to invest in electric vehicle stocks is electric vehicle semiconductor space. Several companies are involved in the electric vehicle semiconductor space. One of them is NXP Semiconductor, which has huge exposure to the sector. While it is dependent on the car industry, NXP is also able to provide other industries with a cushion if the EV market goes upended. Plus, the group’s free cash flow last year was $2.1bn. It gives the management room to make strategic decisions, while also allowing the company to return some of its funds to shareholders through dividends and buybacks.
Due to the rapid growth of the global chip market, NXP has experienced a supply shortage. The reason for the shortage was that many of the component suppliers were not able to keep up with the demand. This has a positive impact on the company’s pricing power. The chip shortage will continue, though at a lower level than at crisis levels. It could create a glut in the future, which could threaten the profitability of NXPs.
Another place to look for potential EV beneficiaries is in the mining industry. The raw materials they sell are essential to the production of batteries. Platinum Group Metals are a key component in the Hydrogen-Powered Fuel Cell Electric Vehicle industry. The demand for PGMs has grown significantly as EVs have become more prevalent. This has helped boost the profitability of Anglo’s mining division. As a company that’s focused on delivering long-term value to its shareholders, Anglo is committed to increasing its dividend payout to 40% of its earnings.
Strong demand for electric vehicles (EVs) will help sustain this trend for years to come. Anglo is well-positioned to take advantage of the potential growth in the EV market. Its various other businesses are also well-placed to weather any potential volatility.
How to invest in electric vehicle stocks
Electric car stocks are those that focus on the manufacturing of electric cars. Aside from cars, they also include companies that make components used in electric vehicles. Even though many of the major car companies such as Ford or General Motors are developing and manufacturing electric vehicles, they’re not considered electric car companies since their primary products are still considered traditional cars.
The Electric car stocks on the map are Tesla, Nikola, and NIO. Aside from these, one can also consider the stocks of other electric vehicle manufacturers such as Lordstown Motors and Workhorse. Another alternative is to buy stocks of these companies: QuantumScape, Blink Charging, Hyliion, Velodyne Lidar, and Luminar.
Investors who are not interested in individual stocks can turn to exchange-traded funds. ETFs provide exposure to the electric car market. Although they don’t have the same level of volatility as traditional stocks, they can provide diversified exposure to the sector.
The PowerShares WilderHill Clean Energy Fund is a clean energy exchange-traded fund that tracks the WilderHill Clean Energy Index. It primarily invests in stocks of plenty of electric car companies. This fund holds stocks of Tesla, NIO, Workhorse Group, and Kandi Technologies. It also owns shares of Blink Charging and Plug Power.
The Global X Autonomous & Electric Vehicles ETF fund focuses on autonomous and electric vehicles and is a popular way to invest in companies that make these cars. However, its main focus is on traditional automakers.
The electric car industry is different from the traditional automobile industry because it is so new. Before, only a few companies even produced electric vehicles. Due to the rapid emergence of the electric car industry, the competition is fairly intense. This means that it is difficult to predict which companies will dominate the market shortly. While Tesla is the leading player in the industry, it is still unknown which other startups will succeed.
As part of the proposed infrastructure plan, the US Department of Energy is planning to spend $174 billion on electric car infrastructure. This includes $100 billion for rebates and $15 billion for building charging stations. Many companies are planning on going public in the next couple of years, and the demand for electric vehicles is expected to grow significantly.
Top electric vehicle stocks on the market
Although there is no standard for electric car stocks, they can be compared to the Russell 1000 index. The Russell 1000 has had a return of 48.3% over the past 12 months. Companies with strong track records for earnings growth and market performance are the best candidates for buying and watching. However, most of the new electric vehicle stocks have neither. There are also Chinese EV stocks that are not profitable for now but selling high amounts of EVs, such as Nio and Xpeng. Then there are the auto giants such as Ford and General Motors that are transforming into electric-car producers.
Aside from carmakers, some companies make car batteries and charging stations. Such as electric vehicle charging networks like Blink Charging and ChargePoint. Here is an overview of the most popular electric vehicle stocks to invest in.
Tesla is focused on accelerating the transition to sustainable energy. Its mission is to provide the most affordable and reliable electric vehicles on the market. Tesla has sold over 270,000 Model S, Model X, and Model 3 vehicles globally. To meet the demand for sustainable energy, the company has also launched several energy products, Powerpack, Powerwall, and Solar Roof.
As the world’s only vertically integrated energy company, Tesla is constantly pushing the envelope in terms of energy efficiency and grid-scale technology. The company was founded in 2003 and employs over 10 000 people. The headquarter is in Palo Alto and Tesla is publicly traded at Nasdaq with a ticker TSLA.
Company Website: http://www.tesla.com
NIO is a smart electric vehicle company that aims to shape a joyful lifestyle. Its mission is to provide the best user experience and premium smart electric vehicles. With headquarters in China, different centers in Europe, and manufacturing facilities in other countries, Schneider Nio is a leading global technology company.
In 2015, NIO became the title sponsor of the winning team in the inaugural ABB FIA Formula E. In 2016, the company unveiled the EP9 – the world’s fastest electric car. The EP9 became the first electric vehicle to set a world record at the Nurburgring Nordschleife. It also set multiple other records at the Circuit of the Americas and other renowned tracks.
NIO started deliveries of the ES8 high-performance electric SUV on June 28, 2018. The first production model of ES6 rolled off the line on May 28, 2019. The model was officially introduced to the market on June 18, 2019. The 5-seater smart coupe, the EC6, was launched in December 2019. In January 2021, the smart sedan, the ET7, was also launched.
Nio is a publicly-traded company with a headquarter in Jiading, Shanghai. It was founded in 2014 and employs up to 10 000 people.
Company Website: http://www.nio.com
Nikola is a technology entrepreneur focused on developing next-generation transportation solutions. The company is working to integrate hydrogen fueling infrastructure, vehicle maintenance, and truck technology into a corporate business model.
Nikola’s ecosystem is designed to support the company’s goal of becoming a global leader in zero-emission transportation. By creating this platform, Nikola and its strategic partners can help propel the industry forward by creating a truly global marketplace.
Nikola was founded in 2014 and has a headquarter in Phoenix, Arizona. It is a publicly traded company with up to 1000 employees.
Company Website: http://www.nikolamotor.com
Xpeng is a leading China-based company that specializes in the design and production of intelligent electric vehicles. XPENG Motors is a smart mobility company that aims to provide innovative solutions to China’s tech-savvy customers. Its goal is to create smart mobility solutions that are both practical and futuristic.
The company’s initial backers include He Xiaopeng, the CEO of UCWeb, and He Tao, the former head of R&D at Guangzhou Auto. It has received funding from various international and Chinese investors, including Alibaba Group, IDG Capital, and Foxconn Group.
The company has a headquarter in Guangzhou, Guangdong, and divisions in other Chinese cities as well as San Diego and Silicon Valley.
Company Website: https://www.xiaopeng.com/
Smaller electric vehicle stocks on the market
Electric vehicles are gaining popularity. After a string of explosive gains in 2020, many investors are looking for the next big thing in the industry. In addition, the increasing interest in autonomous driving technology is also expected to boost the sales of cars. But that doesn’t mean things are going to be smooth sailing for the car companies. The global chip shortage is a major concern for the automobile industry. Here is an overview of some of the smaller electric vehicle stocks to invest in.
Li Auto prides itself to be a customer-oriented auto technology company. It was founded in 2015 and has a headquarter in Beijing, China. The company employs up to 5 000 people and is listed on Nasdaq with the symbol LI.
Company Website: https://www.lixiang.com/
Founded in 1995, BYD is a leading high-tech enterprise in China. It is the world’s largest rechargeable battery manufacturer and has the biggest market share for handset Li-ion batteries, keypads, cell-phone chargers, and Nickel-cadmium batteries in the industry.
Through its BYD Auto brand, the company becomes the most innovative national auto brand in the world. It has developed a variety of electric vehicles and green products such as a solar farm. It will continue to develop green products in the future.
The company has a headquarter in Shenzhen, Guangdong, China, and employs more than 10 000 people. It is listed on the Hong Kong Stock Exchange.
Company Website: http://www.byd.com
Lordstown Motors Corporation was established to transform the Ohios Mahoning Valley and Lordstown into the epicenter of electric vehicle manufacturing. Steve Burns, Founder & Chief Executive Officer, purchased the Lordstown Assembly Plant from General Motors on November 7, 2019. Lordstown Motors Corporation is developing the ‘Endurance’, the first fully electric pickup truck in the US. It is supposed to help the commercial pickup truck industry.
The Endurance will have the smallest number of moving parts in a production vehicle. The Endurance has been engineered to have the best crash test specifications in its class. Instead of using gears and universal joints, it has been equipped with electric hub motors that are integrated into the body.
It was founded in 2019 and has a headquarter in Lordstown, Ohio. Lordstown motors employ up to 1000 people. It is publicly traded on NASDAQ with the symbol RIDE.
Company Website: http://www.lordstownmotors.com
Albemarle Corporation is a leading global producer of lithium, bromine, and refining catalysts. They help companies transform their businesses by providing innovative solutions that help them reach their goals. From energy efficiency to transportation and electronics, they help customers succeed in today’s competitive environment.
Their team of experts combines knowledge and experience with the latest technology to provide customers with the best solutions. Their goal is to create lasting value through sustainable solutions that are both cost-effective and innovative.
Albemarle was founded in 1994 and has a headquarter in Charlotte, NC. They employ up to 5000 people and are listed on the New York Stock Exchange with the symbol ALB.
Company Website: http://www.albemarle.com
Arcimoto is a tech company that develops products and technologies that help make transportation more sustainable. Future and Drive is the company’s motto. Its goal is to create a world where mobility is more sustainable and energy-efficient.
The company was founded in 2007 and employs up to 200 people. It has a headquarter in Eugene, Oregon and is listed on Nasdaq with the symbol FUV.
Company Website: http://www.arcimoto.com
Auto technology startup based in Jinhua, Zhejiang, China. Kandi Technologies is listed on the Nasdaq stock exchange. The company’s primary business activities are focused on the research, development, manufacturing, and commercializing of pure EV products and related equipment.
The product line includes battery packs, motors, and controllers.
Company Website: http://www.kandivehicle.com
Electra Meccanica Vehicles
They are a leading producer of custom-built electric vehicles. Their goal is to provide a vehicle that is both affordable and powerful. The Electra Meccanica SOLO is a car that fits seamlessly into a lifestyle. Its modern aesthetics are matched by spirited performance.
The Electra Meccanica Vehicles was founded in 2015 and has a headquarter in Vancouver, British Colombia. The company employs up to 200 people and is listed on Nasdaq with the symbol SOLO.
Company Website: https://electrameccanica.com/
The Workhorse Group is a manufacturer of battery-electric power trains. The company’s facility in Loveland, Ohio is used to produce its new Workhorse chassis. Workhorses’ approach to building electric power trains is based on the company’s proven, mass-produced, and custom-designed components.
Workhorse Group Inc. is a leading manufacturer of medium-duty truck chassis. It offers a wide variety of models and price points that are sure to appeal to fleet operators. The HorseFly UAV is a customized octocopter-based delivery system that is fully integrated into its fleet of electric/hybrid delivery trucks. The HorseFly system is designed to meet the requirements of the Federal Aviation Administration (FAA). Its fully integrated approach allows the driver or assistants to maintain a line of sight while flying the UAV.
The company was founded in 2007 and employs up to 200 people. Their headquarter is in Loveland, OH, and are listed on Nasdaq with the symbol WKHS.
Company Website: https://workhorse.com/
Kaixin Enterprise is a professional manufacturer of aluminum extrusion profiles, heat sinks, aluminum accessories for windows and doors, and CNC machining parts. Well equipped with various CNC machines, milling machines, digital drilling machines punching machines, etc. Kaixin Enterprise Limited can provide its customers with good quality products at a competitive price.
They are also exporting to many countries such as Australia, Canada, China, South Africa, Germany, Russia, etc.
Kaixin Auto was founded in 2006 and has a headquarter in Foshan, Guangdong, China. They employ up to 200 people and are listed on the Nasdaq stock exchange with the symbol KXIN.
Company Website: https://www.kx-aluminum.com
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