While many are thinking about whether electric vehicle euphoria is dead, EV makers across the globe are ramping up production. The future is EVs; whether you get in on the ride or not, they will rule the road. When we talk about EV stocks, the first company that comes to mind is Tesla (NASDAQ:TSLA), but over the years, the competition has become intense, and many players are fighting for the top spot.
The industry saw a slowdown at the end of 2023 and hasn’t picked pace yet. However, as the economy improves, we can see higher consumer spending, and the recent price cuts by EV makers could lure customers to purchase. Sooner than later, the industry will pick up, and owning these EV stocks will help you make the most of the transition.
Tesla (TSLA)
Electric vehicle maker Tesla has been in trouble lately. The stock hit the lowest level in the past six months and is trading for $163 today. It is down 34% year-to-date and has been on a downward rally since December. However, it’s too soon to write off TSLA stock. It might not have performed well over the past few months but it remains an industry leader.
In a big move, the company has a solid opportunity to enter the Indian market. There were regulatory issues earlier, but the government has agreed to lower the import taxes on certain EVs for companies that commit to investing at least $500 million in manufacturing facilities in the country. This will open up a massive market opportunity for Tesla and could boost the Indian EV market.
The competition is growing, but Tesla enjoys a first-mover advantage and has successfully achieved growth in the past few years. However, it had to resort to price cuts due to high inflation and falling demand. As the EV industry picks up, we see that Tesla will report better numbers.
The current dip in the stock is an excellent chance to buy. Despite a drop in the fourth quarter revenues, the company has a strong outlook. It will raise prices on Model Y in Europe, and it could impact sales. However, Tesla has been there and has come back roaring. Buying the stock in a dip is an excellent move to charge up your portfolio.
Li Auto (LI)
One of the top Chinese EV makers, Li Auto (NASDAQ:LI), had an excellent 2023, but its momentum has slowed since the beginning of the year. However, the company has many catalysts working for it. Li Auto recently launched the Li Mega and announced price cuts on multiple models to remain relevant amid the growing competition.
Li Mega is the world’s largest EV, and there is a lot of excitement surrounding it. However, the high pricing might keep the customers away from the car, but the management is considering incentives to increase its appeal.
Li Auto has seen improved profit margins in sales, and I believe this is set to continue. The company expects the deliveries to rebound in March as the economy improves. The company was already acclaimed for its affordable models, and with the price cuts, it aims to gain momentum in the coming months.
Li Auto reported impressive delivery numbers throughout 2023, and its quarterly results set a record. However, the numbers have dropped over the past two months, which has impacted the stock.
Trading at $37 today, the stock is up 65% in the year and 9% YTD. However, there is ample upside potential, and if the EV market improves, Li Auto will be the first to benefit. Morgan Stanley has a price target of $74 for LI stock with an Overweight rating. It is one of the best EV stocks to own today.
BYD (BYDDF)
Tesla’s competitor, BYD (OTCMKTS:BYDDF), has already set a record, and it can do it again. I think the company has the potential to overtake Tesla in the coming years. It reported the highest delivery numbers in 2023, and in the fourth quarter, it sold 526,409 EVs, while Tesla stood at 484,507.
BYD Company has a global presence and a huge export market. Despite the slowdown in the industry, it reported an increase of 48% year-over-year sales in January. If you look at the bigger picture, BYD has the potential to become the largest EV maker globally.
The company has also resorted to price cuts to achieve higher sales, but BYDDF stock hasn’t moved much despite these achievements. It is trading for $26 today and is only up 4% in the year. The stock hasn’t peaked yet, and much more is to come. It has been trading in the range of $22 to $35 over the past year, and there could be ample upside from here.
BYD Company is locking in new partnerships and entering new markets, which will help improve sales. The company has shown consistent growth and is also the second-largest battery maker in the world. It aims to triple its market share in Europe by next year, and if it can achieve this feat, this is one of the EV stocks that will rally.
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.