There is confusion on whether electric vehicle sales have become a disaster or a booming segment. We have seen a dip in the demand for EVs over the past few months, and many believe that it is set to continue, while reports say that EV sales will continue to grow throughout the year. Only time will tell who is correct, but an interest rate adjustment could boost consumer spending, and we may see better numbers.
The recent delivery numbers have sparked optimism in the industry, which is a sign that consumers are looking at EVs again. While all EV makers haven’t been able to impress investors with their delivery numbers, few are shining amidst the competition. The total EV market share in the U.S. has grown to 7.6% from 5.9% in 2023, which shows that the demand for EVs is picking up. The first reason to celebrate is an upswing in EV sales numbers, and with that in mind, here are the three EV stocks to buy. These companies are set to benefit as sales continue to rise.
Li Auto (LI)
One of the top EV makers, Li Auto (NASDAQ:LI), has been firing on all cylinders. The company had an exceptional 2023 and is revving up the engine for 2024. It reported 28,984 vehicle deliveries in March, up 39% year-over-year, and the company’s quarterly deliveries stood at 80,400, up 52.9% YOY. The fourth quarter’s deliveries stood at 131,805 vehicles, and while there is a drop from this number, it is still doing better than several other EV companies in the industry today.
Another reason to invest in the company is it is profitable. Not many EV companies in the sector are profitable, but Li Auto has achieved profitability in the last three quarters. Its earnings report is impressive and has attracted investor interest. Trading at $31 today, LI stock is up 32% in the year. It is down from the high of $47 it achieved last August, but the discount is a chance to load up on this EV maker.
The company is launching a lower-priced Li L6 on April 18, and it will be the lowest-priced product in its lineup. It is a five-seater luxury SUV and will cater to families looking for affordable EVs. It launched the Li MEGA in March, its first battery electric vehicle (BEV) model. The company has ambitious targets of delivering 560,000 to 640,000 cars in 2024. It is one of the best EV stocks to buy and hold long-term.
BYD Company (BYDDF)
The only EV maker that managed to dethrone Tesla (NASDAQ:TSLA), BYD (OTCMKTS:BYDDF) has a global presence and is steadily expanding. It is also the second largest battery maker in the world, and out of its wide range of vehicles, the majority are sold in China. It managed to sell 3 million cars in 2023 and has become a leader in the industry. The company enjoys a pricing advantage and has managed to enter new countries over the past year.
In the first quarter, the company reported sales of 626,236 EVs, which included 300,114 passenger BEVs. While this is down from the highs of the fourth quarter in 2023, it is way better than the quarterly numbers reported by some of the biggest EV makers, including Tesla.
The company saw its sales drop in January and February and picked up in March. However, the overall quarterly sales numbers are nothing but impressive. The sales have picked up after price cuts and tech advances.
It cut prices of several vehicles, and the company saw an 81% YOY rise in net income. I believe BYD will be a winner in the price war with Tesla. As long as the sales numbers keep growing, BYD will thrive.
BYDDF stock has dropped 3% year-to-date and is trading at $25. As one of the best EV makers, the stock looks undervalued to me.
Ford (F)
Ford (NYSE:F), a legacy automaker, has bounced back with its improved March delivery numbers. The company reported sales of 508,803 units in the quarter, up 7% YOY, and it sold 38,421 hybrid vehicles, which is up 42% YOY, while EV sales stood at 20,223 in the quarter, up by a whopping 86% YOY.
The numbers prove that Ford is moving in the right direction, and as the EV sector improves, it will report better sales numbers. It has seen a rise in the demand for SUVs and hybrid trucks.
The company has postponed the launch of its electric SUV until 2027 and will begin working on an electric truck in 2026. Ford has experience functioning in the auto industry and is transitioning towards building a strong EV portfolio. The management aims to set up new plants, including EV battery plants, in the coming years.
While it has cut down on the production of its Lighting pick-up truck, the F-150, it continues to see an improvement in EV demand. The company aims to produce 600,000 EVs in the year, over 2 million by 2026, and by 2030, it wants to see 50% of the annual sales coming from the electric vehicle range.
Trading at $13 today, F stock is up 10% YTD and looks highly undervalued to me. It is inching closer to the 52-week high of $15 but has a long way to go.
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.