What Are the Best Electric Vehicle Stocks to Watch?

Roberto Rivero

The electric vehicle (EV) revolution is well under way around the world, with sales of EVs rocketing in recent years. The global desire to clean up our act when it comes to carbon emissions makes it seem that this trend will continue in the future. But which companies stand to benefit?

In this article, we will examine the prospect of investing in the electric vehicle industry, highlight 3 top electric vehicle stocks to consider in 2023 and demonstrate how to invest in EV stocks in 5 steps.

Investing in EV Stocks

With the world moving towards net-zero carbon emissions by 2050, it seems almost inevitable that the future of the automobile industry is electric.

The UK plans to ban the sale of all new petrol and diesel powered cars and vans by 2030, with all new cars and vans being zero-emission by 2035. The US state of California, which has the largest automobile market in the country, has similar plans in place and the EU is attempting to pass comparable legislation too.

In 2012, 120,000 electric vehicles were sold worldwide. Less than a decade later, in 2021, this figure rose to 6.6 million - 10% of global car sales.

Ten percent of global sales represents impressive growth, but it’s still a long way from 100%, which is surely the end goal. Therefore, it is likely that there will be a lot more investment in this industry in the coming years, with EV stocks set to benefit.

What Are the Best Electric Vehicle Stocks to Watch?

So, what are the best electric vehicle stocks to watch in 2023?

It is important to remember that, when looking for the best EV stocks to buy, what stock is the “best” is often subjective and will depend on various factors, including on your investing goals and your tolerance to risk.

In the following sections, we will take a look at 3 electric vehicle stocks which are well-placed within the industry.

Electric Vehicle Stocks to Watch
Tesla
NIO
Volkswagen

Tesla

The first EV stock on our list should come as absolutely no surprise to most. Whilst it may be predictable, when it comes to electric vehicle manufacturers, Tesla is undoubtedly king. In 2021, its total deliveries of 936,222 vehicles represented an increase of 87% year on year (YoY) and cemented Tesla’s position as the top EV seller in the world.

Unlike traditional automakers, who – under pressure to deliver consistent profits - have been slow at making inroads in the EV market, Tesla made it their sole aim to bring electric vehicles to the mass-market and have invested heavily to achieve this.

This high level of investment is key to Tesla’s success. It meant that Tesla investors had to wait more than a decade after Tesla’s IPO for a profitable year, but we are now seeing the benefit of this investment in the scaling up of Tesla’s production.

Looking forward, CEO Elon Musk said recently that he wants Tesla to sell 20 million electric vehicles in 2030. This is certainly an ambitious target for the young company and the only way of achieving this figure would be through even higher levels of investment in the future.

Depicted: Admirals MetaTrader 5Tesla Weekly Chart. Date Range: 28 February 2016 – 21 September 2022. Date Captured: 21 September 2022. Past performance is not a reliable indicator of future results.

Tesla’s success in the EV market has translated to phenomenal success in the stock market. In the five years ending 31 August 2022, Tesla’s share price gained more than 1,060% and herein may lie a problem for those considering investing in this electric vehicle stock – the share price.

Tesla’s expected future success has led to lofty valuations, which may deter some investors. At the time of writing (21 September 2022) its market capitalisation is $960 billion – which is almost double the combined market capitalisation of the next five largest automobile makers.

NIO

The problem with many EV stocks is the low level of vehicle deliveries, with many companies yet to produce or deliver an electric vehicle. Therefore, it might be argued that, the best electric vehicle stocks are the ones which are already producing and selling EVs.

Tesla is one of the few electric vehicle manufacturers delivering a meaningful number of vehicles. NIO’s delivery figures are much lower, and it appears to have been more affected by supply chain issues than Tesla; nevertheless, although delivery numbers are comparatively low, they are growing.

In 2021, total deliveries hit 91,429 – an increase of 109.1% year on year. More recently, in Q2 2022, the Chinese EV stock delivered 25,059 vehicles – an increase of 14.4% year on year. However, NIO’s lack of profitability appears to have significantly hampered its performance in the stock market.

In the current economic climate investors are prioritising profitable companies which have strong balance sheets. This has been reflected in NIO’s share price, which dropped 38% in the first eight months of 2022, representing a fall of 68% from its high in February 2021.

Depicted: Admirals MetaTrader 5 – NIO Weekly Chart. Date Range: 9 September 2018 – 21 September 2022. Date Captured: 21 September 2022. Past performance is not a reliable indicator of future results.

This steep decline may also be indicative of uncertainty surrounding Chinese stocks in the face of worsening US-China relations and increased regulatory scrutiny from Beijing.

However, despite the uncertainty and lack of profit, the fact that NIO are actually making deliveries and generating a reasonable amount of revenue ($1.5 billion in Q2 2022) puts it at an advantage over many of its competitors.

Yet, whilst NIO may be successful in the future, this does not change the fact that most investors are looking for profits now and NIO remains a speculative investment. Therefore, anybody considering investing in this EV stock should be prepared for ongoing share price volatility.

Volkswagen

Whilst the first two EV stocks on our list were “pure-play” electric vehicle manufacturers, the third is not.

With the tide of demand shifting evermore in favour of electric vehicles, legacy car manufacturers are starting to make positive noise in the EV industry. Many have set themselves bold targets in this exciting market and, whilst Tesla steals all the headlines, traditional automakers have been diligently increasing EV production.

In 2021, Volkswagen (VW) delivered 452,944 electric vehicles (not including hybrids), making it the third largest seller of EVs in the world. The German car manufacturer followed this up strongly in the first half of 2022 with a further 217,064 deliveries.

Although these numbers represent a small percentage of VW’s total deliveries - 5.6% and 5.1% respectively – their growth has been impressive. EV deliveries in 2021 represented an increase of 95.5% year on year and deliveries in the first half of 2022 rose 27%.

Looking to the future, VW aim to spend over $85 billion on new technologies between 2021 and 2025. The automaker expect that 50% of all sales will be EVs by 2030 and, by 2040, almost 100% of their sales will be zero-emission vehicles. Moreover, then CEO Herbert Diess recently stated that he believed VW can overtake Tesla in terms of EV sales by 2025.

So, whilst VW may not be considered by many to be an electric vehicle stock in the purest sense of the term, its rapid expansion and bold future targets certainly warrant consideration.

Depicted: Admirals MetaTrader 5 – Volkswagen Weekly Chart. Date Range: 20 March 2016 – 21 September 2022. Date Captured: 21 September 2022. Past performance is not a reliable indicator of future results.

How to Invest in EV Stocks in 5 Steps

With an Invest.MT5 account from Admirals, you can buy shares in the three EV stocks highlighted in the article. In order to start buying electric vehicle stocks, follow these 5 steps:

  1. Open an Invest.MT5 account with Admirals and log in to the Trader's Room
  2. Find your account in the Dashboard and click ‘Invest’ to open the MetaTrader Web Trading Platform
  3. Search for your favourite EV stock in the Market Watch on the left of the screen
  4. Click and drag the symbol for the electric vehicle stock you want to invest in on to the chart window
  5. Click the New Order button at the top of the screen, enter the number of shares you want to buy and send the order to the market to complete the transaction!
Depicted: Admirals MetaTrader WebTrader – Tesla Daily Chart – New Order. Date Range: 19 January 2022 – 21 September 2022. Date Captured: 21 September 2022. Past performance is not a reliable indicator of future results.

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  • The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations. 
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