Sales of electric vehicles (EVs) are rising steadily worldwide. By 2030, it is anticipated to increase to 39.21 million units from 8.1 million units. Numerous factors, such as worries about pollution, are driving this exponential development. EVs are, without a doubt, touted as the future of transportation, and while battery chemistry may use newer materials and advances will continue, the trend is unstoppable. This results in a more significant number of investors being interested in finding out which ones are the best EV stocks in India. 

EVs are rising with a compounded annualized US semiconductor industry growth rate of 21.7%. Customers prefer low-emission commutes to fossil fuel-powered automobiles, which are killing the environment, and governments worldwide support the EV business with subsidies and legislation. However, the industry did not take off due to the first EVs’ excessively high initial cost, constrained battery range, sluggish speed, and negligible environmental concerns. 

However, over the past ten years, the industry has seen a significant increase in interest among original equipment manufacturers, OEMs, consumers, and governments. As a result, significant investments have been made in EV manufacturing and battery technology, and millions of vehicles have been sold in numerous countries. So, are you curious about which might be the best EV stocks in India to invest in? 

What Makes the Electric Car Industry Different?

As it is so young, the electric vehicle sector is distinct from the conventional automotive business. Until recently, only a small number of businesses produced any form of an electric car, but today every major manufacturer in the world is working on or putting an EV into production. Since EVs have just recently attracted widespread attention, Tesla is the sole well-established market leader. Predicting which businesses will eventually dominate the electric vehicle market can be challenging because start-up EV manufacturers can fight rather effectively with traditional manufacturers for EV market share. Investment in the electric vehicle sector is riskier due to the uncertainty of the US semiconductor industry growth than increasing portfolio exposure to the automotive sector overall.

What are the Top US EV Stocks That Investors May Look to Capitalize Upon?

• Tesla

Tesla is among the most important companies on any list of US EV stocks for electric vehicles. The year 2021 was a success for Elon Musk’s electric car business. In total, Tesla delivered around 936,000 cars. Model Y crossover SUVs and Model 3 sedans made up most of the fleet. With production declining consecutively during the first and second quarters of 2022, management has resolved difficulties with inflation, the supply chain, and factory ramp-up in 2022. The production rate did, however, increase significantly in the third quarter of 2022, reaching a run rate of more than 1.4 million vehicles annually.

Tesla is still pursuing a vigorous manufacturing strategy, hoping to boost production at its Fremont, California, and Shanghai factories. The two more recent gigafactories, or enormous factories, in Berlin and Austin, Texas, currently in the ramp-up stage, are projected to provide the most significant production rise. In addition to record deliveries, Tesla is now making money without selling regulatory credits. The net income increased significantly from only $721 million in 2020 to more than $5.5 billion in 2021. The business continued to post impressive results in 2022, highlighting record sales, operating income, and free cash flow during the third quarter of 2022.

Tesla, one of the best EV stocks in India, however, has been on a downturn for the whole of 2022, despite what seems to be an excellent operating performance. That might be due more to the extraordinary rise in the company’s share price, which peaked in late 2021 at nearly $414 per share. 

Since then, the stock’s value has roughly been reduced in half, yet it continues to be the world’s largest automobile manufacturer by market capitalization. And by an unexpectedly large margin. So although Tesla’s price-to-sales and price-to-earnings ratios have significantly decreased, more cautious investors will likely still have some concerns about its high value compared to conventional automakers.

• ChargePoint

This week, the price of ChargePoint Holdings US EV stocks increased sharply, rising by a healthy 21.6% based on information from S&P Global Market Intelligence. ChargePoint’s quarterly results and outlook dazzled investors during the first week of September 2022, and an analyst picked out the EV charging stock as one of the biggest potential beneficiaries of the Inflation Reduction Act during the second. Thereafter, Maheep Mandloi from Credit Suisse began covering ChargePoint stock with an outperform rating and a $22 per share price target. For comparison, ChargePoint stock is still trading at roughly $17.55 per share, despite this week’s remarkable rise.

Mandloi is one of many analysts who have been optimistic regarding ChargePoint since the IRA went into effect and the firm released great second-quarter financial results. In Q2, ChargePoint’s quarterly revenue increased 93% year over year, breaking the $100 million barrier for the first time. ChargePoint’s losses increased throughout the quarter. However, its installed total of EV charging ports increased by 70% yearly, and its gross margin strengthened sequentially. Above all, ChargePoint anticipates a 100% increase in sales year over year for the third quarter and expects a strong second half of the year that will enable it to achieve $450 million to $500 million in revenue for the entire year.

• Hyundai Motors

The macroeconomic constraints of inflation and supply chain risk have affected sales growth to some extent for Hyundai Motors. However, sales have not yet surpassed 2019 levels. Meanwhile, the Hyundai Ioniq 5’s outstanding performance may indicate a recovery in sales growth. Although August 2022 sales still are nominally below those of 2019, it is significant that plug-in car sales increased by 25%, with the Hyundai Ioniq 5 continuing to be the top-selling EV with an average monthly sales rate of about 8,000 units. 

Additionally, the model was ranked as one of the top 10 selling electric cars for 2022. To assess whether the company can continue to invest sustainably in its business over the longer term, investors are also likely to pay closer attention to long-term debt and cash flow growth.

• Albemarle Corp.

Albemarle Corporation has reported strong growth, but this is not reflected in the price of its shares, offering long-term investors a fantastic opportunity to buy. According to Zacks, Albemarle has battery-grade lithium production facilities in Australia, China, Chile, and the United States. It also has three divisions: lithium, bromine specialties, and catalysts. According to Morningstar, Albemarle was the biggest supplier of lithium for EV batteries, with the lowest prices in the industry as of 2020. As a result, the company’s shares have increased at a rate of around 14% on average annually since its 1994 IPO.

Albemarle exceeded expectations during the second quarter of 2022 and increased its projection. Specifically for lithium and bromine, according to Investor’s Business Daily, Kent Masters (the CEO of Albemarle) stated that the company benefits from robust demand and pricing trends. As a result, the company changed its lithium contracting strategy during the previous year to gain more from these robust market dynamics.

• Ford Motors

Ford’s brand portfolio and robust sales of electric vehicles continue to drive the company forward despite layoffs and the cancellation of its Transit Connect van the following year. Given the political climate and growth of charging stations, several US auto stocks seem appealing, given the emission restrictions and peaking fuel prices worldwide. Although some obstacles are foreseen, such as supply chain issues caused by the Chinese drought combined with chip shortages, leading manufacturer Ford has shown resilience and positive signs of growth. Ford has strong fundamentals, a discounted value, and high Quant Factor grades, particularly positive earnings revisions and tremendous stock momentum.

The explosive expansion of electric vehicles is one area in which Ford excels, particularly in light of the startling increase in petroleum costs. Since California’s Air Resources Board intends to outlaw the sale of gasoline-powered vehicles by 2035, strict pollution regulations are making way for EVs. Tax credits could be advantageous for businesses like Ford, whose early growth investment in the EV market is paying off due to the new Inflation Reduction Act. Ford, one of the top auto stock options, has increased by about 21% in the past year. 

The Bottom Line

Investors who want their portfolio exposed to the electric vehicle market but do not want to choose specific US EV stocks might purchase shares of exchange-traded funds (ETFs). Regarding ETFs for electric vehicles, there are many choices for finding the best EV stocks in India. You could check out the Electric Vehicle Portfolio Stack or the Global X Autonomous Electric Vehicles ETF on Stockal, for example, if you do not want to risk your entire portfolio on individual US auto stocks. You can further look into Stacks on Stockal.