The electric vehicle (EV) space is a great sector for beginner investors to get in on as it has massive potential for returns. With almost every first-world country on Earth bringing in laws to promote electric vehicles, by preventing the sale of any new gas-powered cars, the possibilities are endless for EV companies.
So what EV stocks should new investors buy?
This is the most obvious EV stock for beginners to snap up. Tesla (NASDAQ: TSLA) is the primary EV play as it focuses all of its efforts on creating innovative technology that has transformed the space. The California-based firm’s products and business model have been vital in the push towards a more green future by transforming the motor industry.
There is also massive growth potential still to come as it gets ready to launch more models, such as the Cybertruck, which is now expected to be released in 2022. A semi-truck and a supercar are also in the pipeline and are set to hit dealerships in 2022. CEO, Elon Musk, has also said that the company is also working on an electric ATV, priced at $25,000, and a van.
Another benefit that Tesla holds is that it is already established in the industry and many consider it the leading stock in the EV space. This means that competitors have a lot of work to do if they want to catch up to it.
In 2020, Tesla shares increased by almost 700%, providing amazing returns for its shareholders. While Tesla has been confronted with issues and safety investigations, the company enjoys a cult-like following which isn’t likely to go anywhere soon.
NIO (NYSE: NIO) has been described by Wall Street as the ‘Chinese Tesla’ and is a great upstart challenger to number one on our list.
With China being dubbed as the EVs most important global market for players to dominate, NIO has a great opportunity as a home-grown challenger to compete in the busy market. The Shanghai-based company delivered 21,896 EVs in Q2, up 112% year-over-year.
While it may be a much riskier investment bet than more traditional automakers, Volkswagen or General Motors, its benefit of being founded in China means that the Chinese government will favour NIO in the thriving market over foreign rivals. With the country expected to reach 2.5 million EV sales this year, this is a big benefit.
NIO is another pure-play option as its main priority is producing high-quality EVs, making it a great investment. The company has massive potential for growth and definitely should be considered as a valuable alternative to Tesla.
The traditional, grandad of the auto world is also racing ahead in the EV space. Ford’s (NYSE: F) Mustang Mach-E model is already ranked number 2 in sales among electric sport utility vehicles in the U.S. and sales of this model grew 15.8% in July compared to June. Ford’s EV portfolio also reached a new sales record in July, with sales up 57.5%.
The automaker’s all-electric Ford F-150 is also viewed as a worthy contender to Tesla’s Cybertruck on price, driving performance, design, and size.
Ford stock represents a solid, safe foundational investment for risk-averse investors looking to get a slice of the EV pie. While growth may be modest, Ford is reasonably stable and adapting to the EV market by using its years of experience building safe, reliable motors.
Its new initiatives with its EV efforts are likely what is driving the stock up lately, shares are up 85% over the past 12 months. If it keeps up the trend of releasing great non-gas-powered vehicles, there’s no limit on how much this stock could shoot up.
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Financial Writer at MyWallSt
Nicole's favorite stock is Etsy because she loves its original and handmade items. She believes people are going to stop buying mass-produced items and start purchasing ‘one of a kind’ fashions and furnishings. In a world of sameness, Etsy has the advantage.