Stocks to buy

Electric vehicle stocks still have plenty of explosive upside potential. For one, there’s no shortage of demand. For example, according to the International Energy Agency (IEA), 14% of all auto sales were electric in 2022 – a strong uptick from just 4% in 2020. This year, the agency says worldwide EV sales could account for 18% of all autos sold. By 2030, the Biden Administration wants that number closer to 50%, creating a substantial upside opportunity for the best EV stocks to buy.

Two, automakers see so much demand. Many are investing millions in lithium, for example. Albemarle (NYSE:ALB) will deliver more than 100,000 tonnes of lithium hydroxide over a five-year period to support Ford EVs. Sociedad Quimica y Minera (NYSE:SQM) just announced a long-term strategic agreement with Ford Motor (NYSE:F) to secure the supply of high-quality lithium. General Motors invested $650 million in Lithium America’s Thacker Pass lithium mine. However, this is just the start.

With no signs of slowing growth, some of the best EV stocks to buy still have plenty of explosive upside potential, including these three.

Best EV Stocks to Buy: Albemarle (ALB)

Source: IgorGolovniov/Shutterstock.com

The last time I mentioned Albemarle, it had just pulled back to $195.54 a share. I even mentioned, “I strongly believe the stock could see another strong rebound on a tight lithium supply story. Better, as we wait for ALB to recover, we can collect its current 0.82% yield.”

That was on June 6. Days later, ALB hit a high of $231.90. Not only did analysts, such as UBS and Baird, just upgrade ALB to a buy rating, the company just inked an agreement with Ford Motor to deliver battery-grade lithium. We also have to consider that lithium supply cannot keep up with demand, which will only make lithium stocks far more attractive. From a current price of $231.90, I’d like to see the ALB stock challenge $300 this year.

We also have to consider the company’s CEO, Kent Masters, has skin in the game. As ALB slid, the CEO bought another 5,470 shares at an average price of $181.64 for just under $1 million. He now holds more than 51,000 shares worth about $10 million. Even he knows the lithium supply and demand story is far from leveling out.

Tesla (TSLA)

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Or, look at Tesla (NASDAQ:TSLA). After crashing from about $325 to about $100, the stock raced back to $260.54. From here, I’d like to see it retest for $325 again shortly. Even analysts at RBC Capital just raised their price target to $305 from $212. KGI Securities raised its price target to $335. Citi raised its price target to $215 from $175.

Helping, the company just announced charging station partnerships with General Motors (NYSE:GM) and Ford Motor. Plus, there’s hope TSLA can benefit from the Inflation Reduction Act, which allows some customers to claim up to $7,500 in credits when buying Tesla models. Plus, consider this. At the moment, EVs only account for 14% of all auto sales. As that number climbs to an expected 18% this year and potentially to 50% by 2030, TSLA could multiply in size.

Plus, Tesla’s Model Y is now the world’s best-selling car. Tesla’s EV outpaced all other vehicles by selling 267,200 in the first quarter of 2023, says Robb Report, as noted by Yahoo Finance.

Li Auto (LI)

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Since the start of the year, Li Auto (NASDAQ:LI) exploded from a low of about $14 to $34.41. While it’s a big overbought, with a desperate need for a healthy pullback, Citi analysts are making a buy case for the stock. In fact, Citi analyst Jeff Chung just opened a “30-day catalysts watch” on the stock, which means he expects something good to happen in the next 30 days. For example, as noted by Barron’s, he expects company shipments to accelerate in the next few weeks.

Even better, Li Auto delivered 52,584 vehicles in the first quarter of the year – a 66% jump year-over-year. Going forward, Li expects to deliver between 76,000 and 81,000 vehicles in the second quarter, which would represent a growth of about 165% to 182%.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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