Our 3 Top EV Stock Picks for 2023
This year could be a breakout year for these EV stock picks for 2023. Secular trends for the EV sector remain very encouraging in any case. It is anticipated that there will be 26.4 million EVs on U.S. roads by 2030. That’s up from the 2018 estimate of 18.7 million EVs projected to be on U.S. roads by 2030.
The overall growth rates associated with EVs are astounding. With an expected compound annual growth rate of 23.1% between 2022 and 2030, it’s easy to see why investors remain highly interested.
So, despite the decline in EV stock valuations in 2022, 2023 continues to look promising. Overall indicators, including the Global X Autonomous & Electric Vehicles ETF (NYSEARCA:DRIV), have fallen, to be sure. DRIV shares have lost 25% of their value this year alone.
But it’s naïve to think that the trend is anything other than transitory. Inflation is expected to fall to between 2.8-3.5% in 2023. That will mean that capital should flow into EV stocks again as some semblance of market normalization takes hold. Investors should consider directing capital into these EV stock picks for 2023 to take advantage.
Tesla’s (NASDAQ:TSLA) stock remains a pioneering force in the EV space. Article after article has recounted the story of its ascendance and Elon Musk’s efforts to build the company. I won’t bore you by recounting it. Instead, investors should pick TSLA shares for their price, fundamentals, and the firm’s continuing evolution.
The price portion of the argument in favor of Tesla is simple. With a current price of $194 and a target price of $288, Tesla shares are expected to appreciate in price by roughly 50% over the next year and a half.
From a fundamental perspective, Tesla is doing very well also. During Q3, revenues increased to $21.45 billion from $13.76 a year earlier. It’s difficult to find many companies that possess 55% revenue growth. Yet, that figure is precisely what Tesla delivered during that period. As strong as that performance was, the company’s net income numbers were even better, doubling to $3.331 billion during the same time frame.
Tesla has delivered a semitrailer truck to PepsiCo (NYSE:PEP), marking its long-delayed expansion into the logistics sector. The project will go a long way toward opening new revenue streams for the company and could make Elon Musk even more newsworthy than he already is.
BYD (OTCMKTS:BYDDF) stock is increasingly looking like a clear winner within a strong Chinese EV sector.
The company led November EV sales in China, the world’s largest and fastest-growing market. During the month, the company sold 113,915 all-electric EVs. That represented 147% growth on a year-over-year basis. Overall, BYD sold 230,427 electric and hybrid-electric in November.
Those strong numbers continue the larger trend of rapid growth for the company, which has sold 1.2 million vehicles through the first nine months of 2022. And while BYD’s dominance within its home market is impressive, the company has big expansion plans.
The company intends to expand into more than 15 international markets after moving into Norway last year. The company has retail expansion plans in the works for Germany, Denmark, Sweden, and Israel.
It is also moving into Japan and Thailand, where it intends to build a manufacturing plant, as well as Mexico, among other markets. BYD’s ability to best Tesla in terms of sales in China has set it on a path of rapid growth that EV stock investors should not ignore.
Nio (NYSE:NIO) remains a top EV stock despite the fact that BYD’s sales far outpace those of the company.
Just as with BYD, though, it’s sales that truly matter and make Nio a great choice for 2023 and beyond. Nio sold more than 14,000 EVs in November. That’s an increase of 30% over sales a year earlier. And on a sequential basis, it’s 41% more than the company sold in October.
So, despite the relatively small overall sales figure compared to BYD, Nio continues to grow very fast. The announcement comes with strong news otherwise. The 14,000 in vehicle sales was ahead of the 13,500 vehicle sales expected by analysts, and the same analysts expect December production and deliveries to increase.
Nio recorded $1.678 billion of vehicle sales in Q3, a 38.2% increase over Q3 ‘21 figures. At the same time, Nio reported a net loss of $577.9 million during the period. While that could logically scare off investors in the short term, Nio’s trajectory makes it too big to ignore, and its place in China only adds to its allure.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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