Countries across the world are moving towards electric vehicles to build a cleaner and greener future. Currently valued at over $250 billion, the EV market is projected to reach $561 billion this year and the market unit sales are expected to hit 17 million by 2028. While the electric vehicle industry suffered from a slump last year due to the China lockdowns and supply chain issues, the industry has recovered and is expanding. It is time to start looking for top EV stocks to buy now.
Despite the impressive projections and numbers, the adoption of EVs across the world is presently very low, indicating there will be higher demand in the coming years. Many countries offer incentives for their adoption including subsidies, tax credits, or a target deadline to stop selling fuel-driven cars. EV makers will have to go all out to meet the demand. This is where automakers are set to benefit. The EV industry is going to soar in the coming years and you can make the most of the upside by investing in the top EV stocks to buy now.
Tesla (TSLA)
A leader in the industry and a true pioneer when it comes to electric vehicles, Tesla (NASDAQ:TSLA) could soon hit a valuation of one trillion. The company has a market cap of $800 billion and its recent rally is taking it closer to hitting a new valuation. TSLA stock is trading at $256 and is up 39% in the month. It is up over 130% year to date and 135% in the last six months.
Tesla is growing its charging network and recently inked new partnerships with General Motors (NYSE:GM), Ford (NYSE:F), and Rivian (NASDAQ:RIVN). These EV makers will get access to Tesla’s Supercharger network and Tesla will enjoy another stream of revenue.
Another reason to invest in the company is its integration of AI. Tesla is working on its full self-driving platform (FSD), and it has enough data to build a software that can create a safe, self-driven car. It also plans to start a production unit in India, which could help reduce costs and enter a new market. The best thing about Tesla is Elon Musk’s leadership and his ability to innovate.
Tesla enjoys a high brand value and is priced at a premium, but I believe the company will continue to report strong revenue and delivery numbers in the coming years. It also plans to mass-produce a robotaxi in 2024 which could change the future of the automobile industry. When you look at the big picture, Tesla has the right manufacturing capabilities and solid leadership that can take on the world, making it one of the high-potential EV stocks to buy.
BYD Company (BYDDF)
Warren Buffet’s favorite EV company Byd Co. (OTCMKTS:BYDDF) is a top Tesla competitor. As the current second-largest EV battery supplier, it aims to become the leader of battery-only EVs. Yes, there are certain risks associated with investing in Chinese companies but there is also high growth potential. Having delivered 996,476 cars so far this year, it is already on the way to hitting big numbers in 2023. It aims to sell 4 million EVs by end of year, and I believe the automaker can reach that goal. Besides reporting impressive delivery numbers, the company is charging ahead with its EV batteries.
The company recently launched a new brand Fang Cheng Bao which features sports cars and off-road models. Despite having its roots in China, BYD has a solid market outside of China and is actively expanding across different countries. It recently launched BYD Dolphin in Australia.
As an EV battery manufacturer, the company will see a rise in demand as the adoption of EVs grows. It also aims to increase the production of lithium iron phosphate Blade Batteries and has invested $1.2 million in the China plant.
With an impressive growth rate, BYD stock looks undervalued to me. The stock is trading at $32 today and is up 27% year to date. While Tesla is already priced at a premium, BYD has a long way to go. Another advantage that BYD has over Tesla is its product lineup. With a wider product line-up and placement on the verge of expansion, BYD provides a wider choice to consumers. This can lead to higher sales and revenue numbers in the coming years. BYDDF is one of the EV stocks for immediate investment.
Li Auto (LI)
Li Auto (NASDAQ:LI) is another EV stocks to buy now. While several EV makers saw a drop in sales and revenue in 2022, Li Auto kept growing steadily. Well-placed in China, the company has impressed investors with its strong delivery numbers and quarterly numbers. If you compare Li Auto with other EV makers like NIO (NYSE:NIO) and XPeng (NYSE:XPEV), Li that shines the most. LI stock is trading at $33 today, up 58% year to date and up 79% in the past six months. The company has a modest valuation and the stock has enough space to grow. It could enjoy a solid run in the coming months.
It delivered 28,277 vehicles in May and topped 20,000 EV deliveries for the third consecutive month. Li Auto reported a revenue of $2.74 billion in the recent quarter and has consistently reported profits in the last two quarters. The company saw a 97% top line growth and a 77% rise in gross profit. This is proof that the management has successfully kept costs under control while ensuring that production grows. There is a positive sentiment around Li Auto. As the company continues to grow its production and deliveries, we will see better revenue and profit numbers. This is one of the top EV stocks for immediate returns. If there’s only one EV stock you want to buy, I’d recommend Li Auto.
On the date of publication, Vandita Jadeja did not hold (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.