Best 3 EV Stocks to Trade in July 2023
Jun 26, 2023
Electric vehicles have become increasingly popular as consumer attitudes toward fuel efficiency and environmental impact push them away from combustion engines. In 2022, nearly 5% of the vehicles sold in the United States were EVs, a big jump from 1.6% in 2019, according to the International Energy Agency (IEA).
That number is only expected to grow. By 2030, EVs could account for 40% of all passenger vehicles sold, S&P Global Mobility predicts. This growth represents a fundamental shift in the automobile industry—something investors surely won’t miss. But what are the best electric vehicle stocks to invest in to capture the enormous growth? We’ll discuss the top three.
No big surprise here. The undisputed king of the electric vehicle market is Tesla (TSLA), now a household name in America that is nearly synonymous with Elon Musk—a controversial figure. Some believe he will save the world—others not so much.
Still, regardless of your view on Musk, Tesla offers a convincing case for a place in your portfolio. Since its founding 30 years ago, Tesla has pioneered electric vehicles, achieving what many said was impossible.
The company’s ambition has arguably advanced the industry to where it is today, from its work on self-driving technology to developing and producing long-range battery technology and charging solutions. There is little reason Tesla can’t push the envelope farther; it certainly has the resources and capital to do just that.
So far this year, Tesla has had a few notable victories, including deals with General Motors and Ford that will include them in its Supercharger network. The Model 3, one of its most popular offerings, received eligibility for the complete U.S. EV tax credit. And Tesla is primed to take advantage of the artificial intelligence boom, fueling investor sentiment. The above makes a strong case to include Tesla in your portfolio.
Lucid Motors (LCID), a maker of luxury electric vehicles, is poised to capture market share in the coming years. While not as well-known or well-financed as Tesla, this EV maker has made big moves in 2023 that show it has the tenacity to drive with the big boys.
Earlier this year, Lucid struck a deal to raise about $3 billion to finance the company through the next few years. Although it wasn’t well received, Saudi Arabia’s Public Investment Fund (PIF) provided the bulk of the money, giving it a little more than 60% ownership. New shares via a public offering supplied the remainder. The deal gives Lucid plenty of cash, ~$3.5 billion, to advance its goals.
Recently, however, and perhaps more appetizing to investors, is a deal with Aston Martin to supply parts to the British sports car maker. An opening $142 million, including a 3.7% stake in Aston Martin, cemented the agreement. When you see an electric Aston Martin in the next James Bond film, you could thank Lucid. And perhaps you’ll be thanking Lucid when you look at your annual returns, too.
The electric vehicle list wouldn’t be complete without a Chinese cohort. Although more speculative than Tesla, NIO (NIO) is a potentially formidable foe in the EV race. The company has recently faced cash flow challenges, but it has also received major investments that, if used properly, may revive its name as the “Tesla Killer” among investors.
In early June, NIO received a $740 million investment from an Abu Dhabi fund. That solves the cash flow problems for now and enables it to focus on selling cars and overcoming production challenges. While the Chinese market is hungry for EVs, there is no lack of competition, including Build Your Dreams, the largest Chinese EV seller by volume.
NIO will have to be nimble in its decisions if it wants to outlast multiple startups in the market. Overall, EV sales have slowed in China amid a broader economic slowdown, and like most others, NIO has slashed prices recently. A spirited move to offer battery swaps to customers, which could make a new vehicle much cheaper for those who already have an EV, could revamp sales, but it will take a while to be profitable, according to Nio’s chief executive.
Nevertheless, a newly redone SUV, the ES6, is so far well received, and price cuts to other models may help sales. In the meantime, investors are waiting for further stimulus efforts from Beijing, which could help underpin consumers’ health and reenergize hunger for EVs.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.