7 Electric Vehicle Stocks That You Can Trust for the Long-Haul
InvestorPlace - Stock Market News, Stock Advice & Trading Tips While substantially hyped in recent years, electric vehicle stocks have disappointed. Here are the ones you might be able to...
It's a statement that you've heard electric vehicles are the future. If that's the case, why are some of the most-hyped electric vehicle stocks performing so poorly?
On the surface, EV stocks should be killing it. Unlike combustion cars, the federal government is doing everything it can to help you make the transition to this new system of propulsion. From tax credits to the ability to use the carpool lane as a sole driver in certain jurisdictions, it pays to be an EV driver.
However, it does not pay to be in electric vehicle stocks — at least for quite a few anticipated manufacturers. One would be right to wonder whether this sector worth consideration?
While anything can happen, it's quite possible that the underperformance in the market for many EV stocks is emblematic of the situation where the sector has been.
Discourse contributor Emily Washburn said the sector has been "swathed in fantasy and fanfare for years." As she put it, "a range of serious economic, logistical and environmental obstacles suggest that electric vehicles won't be taking over the roads anytime soon, if ever."
That's a massive step away from the adage that EVs are the future. Yet as author Robert Bryce pointed out in his excellent article for RealClear Energy, electric propulsion has been dubbed the next big thing for over a century.
Under this context, it's not terribly surprising that many electric vehicle stocks have floundered since their debut. EVs do not represent new technology.
However, this doesn't necessarily mean you should give up on the industry entirely. Moving forward, the most viable solution may be a market where EVs and combustion cars run side by side, with the latter still maintaining dominant market share.
It's not what environmentalists want to hear but these electric vehicle stocks are for the realists.
- General Motors (NYSE:GM)
- Ford (NYSE:F)
- Toyota (NYSE:TM)
- Honda (NYSE:HMC)
- Lucid Group (NASDAQ:LCID)
- Volkswagen (OTCMKTS:VWAGY)
- Panasonic (OTCMKTS:PCRFY)
Although some EV stocks appear poised for long-term success, the overall sector has been rather shaky due to outside factors, such as geopolitical tensions and speculation on how the Federal Reserve will respond to soaring consumer inflation. Therefore, take these ideas with a grain of salt and above all, do your due diligence.
General Motors (GM)
Generally, when it comes to cars, I'm an import type of guy — perhaps because I'm an import myself. Plus, I've never found domestic automotive brands very appealing. However, General Motors is changing perceptions, including my own.
While GM has long been known for cars like the Camaro and the Firebird, the company is making a name for itself as one of the top electric vehicle stocks to buy. With the development of the GMC Hummer EV Pickup and SUV, General Motors can have its cake and eat it too.
Driving enthusiasts (and wealthy soccer moms) can enjoy the iconic Hummer brand while simultaneously imposing an overall less-onerous carbon footprint.
If GM is correct on its performance estimates, the pickup can do zero to sixty in a blistering three seconds, whereas the SUV is not too far behind at 3.5 seconds.
However, the beautiful part is that GM hasn't lost sight of its racing heritage. Its eighth-generation Corvette absolutely killing it on the dealership floor. With a mix of combustion and electric, this is one of the EV stocks you can trust.
Before I start typing any more words, you should be aware that I own shares of Ford.
Since I have skin in the game, be sure to acknowledge that I may have some hidden bias that may slip into my assessment of the company.With that caveat aside, I genuinely believe that over the long haul, Ford is one of the electric vehicle stocks you can put your confidence in.
Back in July 2020, I stressed how important the company's Mustang Mach-E could be. True, automotive enthusiasts didn't care for the Mustang brand being attached to an SUV.
Not to be macabre but the core demographic for traditional Mustangs — that is, with those muscular V8 engines — has been aging out. Today, consumers want practicality with performance baked in.
Well, the Mach-E provides exactly that and recent sales figures confirm it. Last year, Ford sold 27,140 of its electric SUVs, making it the second-best seller in its category. Only the Tesla (NASDAQ:TSLA) Model Y beat it out, which is an impressive feat.
Long known for its heritage of reasonably priced and reliable combustion vehicles, on paper, the influx of electric vehicle stocks has put some pressure on good ole Toyota.
Add in the terrible impact of the coronavirus pandemic on global supply chains and suddenly, the company appeared very vulnerable.
However, the company's pivot toward electric propulsion makes it worthy of consideration for long-haul EV stocks to buy. In addition, I appreciate that Toyota is thinking ahead with unique technologies, including news of a simulated manual gearbox for electric cars.
At first, the concept sounds utterly ridiculous. Using a simulated manual transmission — complete with a clutch pedal that mimics the experience of driving a petrol car in an EV — will almost surely make the vehicle run slower.
However, it could also be a genius move because it could allow a more organic transition for diehard gearheads.
Even if this patented tech doesn't make it into production, Toyota's research and development with solid-state batteries could one day change the EV market. Presently, it's aiming for integration with hybrid vehicles. Thus, if you have a patient outlook, TM could be one of the EV stocks to consider.
One of the world's most popular auto manufacturers, Honda earned its reputation through legendary reliability — and if there are any JDM fans who read this, VTEC!
Seriously, though, I can't stress enough how well-manufactured these vehicles are. While it's anecdotal, I've heard multiple stories of people abusing their Hondas and forgetting regularly scheduled maintenance items, yet they keep running strong.
And if you don't want to believe in the anecdotes, fine. Just read any automotive journal to confirm Honda's place as one of the most dependable rides.
However, we don't get to hear much about the company's role as one of the top electric vehicle stocks. To be fair, Honda's foray into the EV market is a little worrying from a stylistic perspective.
Nevertheless, management has committed to electrifying two-thirds of its global auto unit sales by 2030.
If for some reason it doesn't reach that milestone, fear not. Honda will still pursue its main moneymaker: low-cost, fuel-efficient and reliable cars for the everyday household, not just the rich folks who can afford EVs.
Lucid Group (LCID)
Speaking of rich folks, we got to talk about Lucid Group. One of the common headwinds regarding electric vehicle stocks — particularly the startups that took aim at Tesla's dominance — is that their underlying products are far too expensive for the median household, which earns roughly $70,000.
Granted, some markets will earn substantially more than others but with the average EV costing $56,437, it's not something that many families can easily afford, and that's the main reason why I believe Lucid Group is one of the EV stocks you can trust.
The company makes no bones about catering to the rich. And you know what? Affluent buyers love Lucid, with the company's Dream Edition — which commands a price of $169,000 — all spoken for.
Moving forward, EV stocks will likely pivot toward the regular-income crowd. But until the market grows enough to justify economies of scale, Lucid can continue pampering the well off.
Among the most iconic automakers in the world, Volkswagen now has a new mission in mind: be one of the top electric vehicle companies.
It's not just wishful thinking as the leadership team is planning on building a new EV factory. Even though the company is missing production targets due to the ongoing semiconductor shortage, it's determined to set the right framework for its electric ambitions.
If you're unsure about which one of the much-hyped EV darlings can actually make it, you might as well consider Volkswagen.
Even though it probably won't facilitate the ridiculous gains you might accrue from a long-shot wager going right, VWAGY is simply more credible than a freshly minted enterprise.
Further, the company can appeal to multiple income levels. For instance, the 2023 Volkswagen ID.4 is an all-electric compact crossover that will price around $35,000.
Although not terribly exciting from a performance perspective, the ID.4 could intrigue folks who simply want to get from point A to point B.
Also, Volkswagen owns Porsche, which itself is moving into the EV space with the Taycan. There may be exciting times ahead for this German juggernaut.
Though not a direct name among electric vehicle stocks, consumer electronics firm Panasonic has long undergirded the sector with its EV battery packs.
As you likely know, the company features a long partnership with Tesla, helping it become the top brand in the EV space.
What's more, Euronews reported in late January of this year that "Panasonic will begin producing a new lithium-ion battery for Tesla as soon as 2023, with plans to invest about 80 billion yen (€622 million) in production facilities in Japan."
The electronics firm unveiled the 4680 format battery in October last year, which could be a gamechanger.
Currently, Panasonic is the only supplier of Tesla's advanced battery packs, giving PCRFY a clear edge over battery-providing rivals. From the looks of things, this dominance should continue into the future.
On the date of publication, Josh Enomoto held a LONG position in F. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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