Key points to remember
- As governments around the world spend money to develop renewable energy sources, the adoption of electric vehicles is sure to grow.
- Tesla has announced it is cutting prices in China, and many analysts are worried about what that means for demand for electric vehicles.
- There are many ways to invest in electric vehicles, including automakers, battery manufacturers, charging stations and even precious metals.
With oil prices everywhere this year, people have every reason to turn to electric vehicles (EVs). However, growing worries of a global recession could impact all businesses as consumer sentiment wanes about the future of the economy.
Tesla recently announced it was cutting prices in China due to slowing demand and worries about a recession. There are additional worries about what this will mean for demand for electric vehicles, as fears of a global recession continue to impact the stock market.
So, are electric car stocks a buy right now?
What are the best electric cars in 2022?
When it comes to the best electric cars on the market, we’ve looked at expert suggestions and created a list of this year’s best electric vehicles.
In no particular order, the best options for winter 2022 include:
- 2022 Polestar 2
- 2023 Nissan Leaf
- Tesla Model 3 2022
- 2023 Chevrolet Bolt Electric
- 2022 Kia Niro Electric
- 2023 Electric Mini Hardtop
While everyone associates Tesla with electric cars and probably assumes they’re the best on the market, many competitors are moving up the ranks. This presents multiple opportunities to invest in this industry in the future.
How to invest in electric cars
There are different ways to invest in electric cars. Options include:
- Companies specializing in the manufacture of electric cars
- Companies that manufacture batteries for electric vehicles
- EV Battery Component Suppliers
- Companies that manufacture charging stations for electric cars
But which companies should you invest in? It depends on the type of investor you want to be. Alas, when the demand for electric vehicles increases, all companies in this industry benefit.
What are the best electric vehicle stocks right now?
There are plenty of stocks worth looking at, as you consider these picks, keep in mind that electric car stocks haven’t outperformed the market lately due to concerns about an economic downturn that could harm the demand in the market for electric vehicles. Electric vehicles are still considered a luxury, even though retail prices have become much more competitive, especially when consumers factor in the price of maintenance and fuel.
Additionally, it is worth paying particular attention to startups in this space as they attempt to scale up production. Here are some notable electric car stocks you should know about.
It is impossible not to include the brand synonymous with the market. Tesla remains in the news for a variety of reasons, including recent earnings and the hype surrounding a humanoid robot.
Even though the stock has been dropping lately for different reasons, it is still a stock worth watching.
General Motors (GM)
In a surprising pivot, GM recently announced a new EV energy venture that would allow them to rival Tesla when it comes to energy management.
GM believes the market potential for energy storage and management is around $120-150 billion. Therefore, the automaker is now launching its Ultium Charge 360 public charging stations as well as the Ultium Home and Ultimum Commercial services.
The company will offer storage batteries, solar panels and hydrogen fuel cells.
This company is one of the leaders in the development of solid-state batteries. The hope is that they can produce them on a large scale one day.
Analysts will be paying attention to the company’s upcoming earnings report to see how the next generation of cutting-edge batteries fare. The batteries use lithium-metal technology to charge a vehicle to approximately 80% of full capacity in approximately 15 minutes.
Rivian Automotive Inc. (RIVN)
Rivian was the first company to market an electric pickup truck. The company recently had a problem with the vehicle recall, but it says all of those cars have been repaired.
This Amazon-backed company has manufactured around 13,000 trucks since production began in late 2021.
ChargePoint Holdings Inc. (CHPT)
ChargePoint operates more than 18,000 charging stations and allows you to invest in electric cars without a specific manufacturer.
Shares have recently fallen on concerns about future demand for electric vehicles. However, the company will not release its earnings report until December.
Being one of the largest lithium miners in the world puts this company in a strong position to benefit from the electric vehicle market.
Since lithium is used for everything from EV batteries to energy storage systems, Albemarle will benefit from electric cars as they become more popular. However, lithium stocks could face problems if demand for electric vehicles declines due to economic concerns.
Lucid Group, Inc. (LCID)
Lucid produces luxury electric vehicles, a potentially lucrative market one day. With Tesla’s leadership, the company is focusing on the high end of the electric vehicle market.
This company has approximately $3.5 billion in potential sales from current bookings. It produced 2,282 vehicles in the third quarter of 2022 and also announced the opening of its first showroom in the Middle East in Saudi Arabia.
Additionally, the Saudi government has agreed to purchase approximately 50,000 Lucid electric vehicles over the next decade.
What’s next for electric car stocks?
Energy management could be the next competitive market for this space. However, concerns remain about the impact of the economy on the demand for electric vehicles in the future.
Fears of a possible recession could lead to lower demand for electric vehicles and other luxury items.
Elon Musk recently said he thinks most people don’t think it’s wise to buy a gas-powered car at this point because the residual value would be low. However, the jury is still out on that logic, as electric vehicles still have a long way to go before mass adoption.
Yet electric vehicle sales accounted for only 5.34% of the total car market. It’s either a sign that there’s room to grow, or that there’s still hesitation to make the switch. More than likely, it’s both, as the market inevitably shifts towards electric vehicles.
Should you buy electric car stocks?
There is a debate about whether the European energy crisis will lead more people to turn to renewable energy sources in general.
What we do know is that countries are introducing laws to help tackle climate change. Governments around the world are investing huge sums in the development of greener energy sources.
The US government enacted the Inflation Reduction Act this summer. This has further spurred companies to develop renewable energy sources and electric vehicles.
When it comes to consumer spending, some of these incentives are really pushing users towards electric vehicles. The Inflation Reduction Act provides a tax credit of $7,500 for the purchase of a new electric vehicle and $4,000 for used electric vehicles.
When we valued Tesla’s stock, we looked at the revenue the company earned from selling the regulatory credits it earns from governments. As the world seeks to develop renewable energy sources and reduce carbon emissions, the future looks bright for electric vehicle stocks.
However, you need to consider the current economy in how you invest your money, as recent inflation data has added more volatility to an already turbulent stock market.
How should you invest?
Electric vehicles may be the future, but most investors are thinking about the present, namely our impending global recession. Most investors avoid growth stocks because discretionary consumer spending declines during an economic downturn.
You can invest in a greener future with Q.ai’s Clean Tech Kit. This kit simplifies investing in the electric vehicle industry. You’ll invest in an industry you believe in without the need to constantly follow prices and news as stock prices fluctuate.
As governments around the world seek to introduce new laws to support the reduction of carbon emissions and encourage the development of renewable energy sources, there could be increased demand in this space.
That said, the electric car market needs more lithium mines globally to keep pace with demand. For this reason, many investors turn to our precious metals kit, as precious metals continue to take on a whole new lease of life. Investing in theme kits diversifies your portfolio across entire sectors, as opposed to buying individual stocks, which could leave investors holding the wrong stocks even if they have a good idea of electric vehicles.
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