It has been one of the most volatile years for equity markets in recent history. The COVID-19 pandemic caused the S&P 500 to lose 35% in just over a month. This was followed by a huge snapback rally which led to the markets making all-time highs.
Amid the chaos, there were a few sectors, such as technology, that thrived this year. However, these returns are nothing compared to the performance of stocks in the electric vehicle (EV) industry.
Let’s take a look at three EV companies whose stocks increased by at least 1,000% in 2020.
NIO Inc. (NIO)
The first company on the list is China-based EV manufacturer NIO (NIO). Shares of NIO have gained 1,047% year to date (YTD), making the company’s market cap now valued at over $69 billion. The company manufactures premium EVs in the largest EV market in the world – China.
EVs are expected to account for 20% of total auto sales in China, up from just 5% in 2020. In fact, EVs are estimated to account for 50% of auto sales in China by 2035.
Earlier this year, NIO launched the BaaS (battery-as-a-service) program providing the company with another revenue stream. Under this loyalty program, NIO purchasers will be eligible for battery replacements or upgrades lowering these costs over the long-term.
NIO recently said it will raise around $3 billion via an equity offering which will boost its liquidity position and help support expansion efforts. These proceeds will be used to manufacture new vehicles, expand its sales and service network as well as fund research and development efforts.
GreenPower Motors Co. Inc. (GP)
Shares of Canada-based Green Power Motor (GP) are up more than 1,600% YTD, which means a $1,000 investment in this stock at the start of 2020 would be worth $17,000 today.
GreenPower Motor is looking to gain traction in the medium and heavy-duty commercial EV segment. Annual shipments in this space are forecast to reach 50,000 by 2025. Green Power Motor has focused on creating an asset-light business model to lower capital expenditures and improve the bottom line.
For example, it uses off-the-shelf subsystems and components to keep expenses in check. The company has partnered with Creative Bus Sales which is the largest network of bus retailers in the U.S.
Blink Charging Co. (BLNK)
The final company in this list is Blink Charging Co. (BLNK), a stock that has surged higher by more than 2,000% YTD, valuing it at a market cap of $1.51 billion. Blink Charging operates and provides EV charging equipment and services in the U.S. It offers residential and commercial equipment that allows drivers to recharge vehicles at various locations.
The company also provides Blink Network, which is a cloud-based system that operates and tracks multiple charging stations as well as provides property owners, managers, and parking companies with cloud-based services enabling remote monitoring and management.
At the end of the September quarter, Blink has deployed close to 16,000 charging stations out of which around 7,000 are on its commercial network. Analysts expect the company to increase sales by 91% to $5.28 million in 2020 and by 90% to $10 million in 2021.
This means the stock is trading at a sky-high price to 2021 sales multiple of 151x making it very vulnerable in a broader market sell-off.
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NIO shares . Year-to-date, NIO has gained 1,047.76%, versus a 17.57% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditya Raghunath
Aditya Raghunath is a financial journalist who writes about business, public equities, and personal finance. His work has been published on several digital platforms in the U.S. and Canada, including The Motley Fool, Finscreener, and Market Realist. More...
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