Increasing climate change concerns and supportive government policies to address those concerns are expected to drive the electric vehicle (EV) industry’s growth. According to a Deloitte report, global EV vehicle sales are expected to grow more than 12-fold from 2.5 million vehicles in 2020 to 31.10 million by 2030, and account for nearly one third of new vehicle sales.
The ongoing semiconductor chip shortage continues to impact EV production. Nevertheless, falling EV battery costs and increased demand for EVs have heightened investors’ interest in the industry. This is evidenced by the Global X Autonomous & Electric Vehicles ETF (DRIV) and the KraneShares Electric Vehicles and Future Mobility Index ETF’s (KARS) 12.3% and 15.6% gains, respectively, over the past month. This compares to the SPDR S&P 500 Trust ETF’s (SPY) 5.9% returns over the same period.
So, we think it could be wise to add EV stocks, Tesla Inc. (TSLA), Lucid Group Inc. (LCID), Xpeng Inc. (XPEV), and Li Auto Inc. (LI), to your watchlist now. These stocks were the top-performing industry participants last month.
Tesla Inc. (TSLA)
Led by the billionaire Elon Musk, TSLA in Palo Alto, Calif., is the pioneer in manufacturing EVs. The company operates in two segments mainly: automotive and energy generation and storage. Its automotive products include Model 3, Model Y, Model S, and Model X.
On October 25, 2021, TSLA received an order for 100,000 of its EVs, valued at $4.40 billion, from rental-car icon Hertz Global. The vehicles are expected to be delivered starting this month through the end of 2022. Customers will be able to rent a TSLA Model 3 sedan at Hertz locations in the U.S. and select cities in Europe. This further expands its reach.
For its fiscal third quarter, ended September 29, 2021, TSLA’s revenues increased 57% year-over-year to $13.76 billion, while its adjusted net income increased 139% year-over-year to $2.1 billion. The company’s adjusted EBITDA increased 77% year-over-year to $3.2 billion. Also, its non-GAAP EPS increased 145% year-over-year to $1.86.
Analysts expect TSLA’s EPS and revenues to increase 169.6% and 62.1%, respectively, year-over-year to $6.03 and $51.1 billion in its fiscal year 2021. In addition, it surpassed the Street’s EPS estimates in three of the trailing four quarters. The stock has gained more than 211% in price over the past year, to close yesterday’s trading session at $1,208.59. It returned 37% in October.
Lucid Group Inc. (LCID)
Newark, Calif.-based LCID designs, engineers, and builds electric vehicles, electric powertrains, and battery systems. As of June 30, 2021, the company had eight retail studios in the U.S. Its offerings include Air Dream Edition, Air Grand Touring, Air Touring, and Air Pure.
On October 27, LCID announced that it would commence deliveries of its much-anticipated luxury sedan Lucid Air after production kicked off in September. The company received its EPA certification on achieving a record range of 520 miles on a single charge. LCID reported that it had received more than 13,000 reservations.
LCID is due to report its third-quarter results on November 15. The company’s EPS is expected to gain 34.8% year-over-year in its fiscal year 2022. Also, its revenues for its fiscal year 2022 are expected to increase 2,179% year-over-year to $1.74 billion. Over the past three months, the stock has gained more than 54% in price to close yesterday’s session at $36.53. The stock returned 35% in October.
Xpeng Inc. (XPEV)
Headquartered in Guangzhou, XPEV is one of China’s leading electric vehicle manufacturers. The company’s offerings include SUVs under the G3 name and sports sedans under the P5 and P7 names. It also provides sales contracts, supercharging, ride-hailing services, and vehicle leasing.
On November 1, XPEV announced that it had delivered more than 10,000 new electric vehicles to customers in October. XPEV said it delivered 6,044 P7 sedans, representing a 187% increase, and 3,657 of its G3 and G3i smart SUVs. It also delivered 437 units of its newly launched P5 sedan.
For its fiscal second quarter, ended June 30, 2021, XPEV’s revenues increased 536.7% year-over-year to RMB3.76 billion ($582.5 million). Its gross profit was RMB448.60 million ($69.5 million) compared to a RMB16.2 million loss in the year-ago period. The company’s non-GAAP loss per share improved 76.1% year-over-year to RMB1.38.
For the quarter ending December 31, 2021, analysts expect XPEV’s EPS to increase 40% year-over-year. The company’s annual revenue is expected to be $2.89 billion in its fiscal year 2021, representing a 218.2% year-over-year rise. Over the past year, the stock has gained more than 147% in price to close yesterday’s trading session at $47.87. It gained more than 35% in October.
Li Auto Inc. (LI)
Based in Beijing, China, LI designs, manufactures, and sells smart SUVs. It sells Li-One, an electric smart six-seat SUV equipped with a range of exchange systems and smart vehicle solutions. As of October 31, 2021, the company had 162 retail stores.
This month, LI announced that it had delivered 7,649 Li ONEs, up 107.2% year-over-year in October. As of October 31, 2021, the year-to-date and cumulative deliveries of Li ONEs were 62,919 and 96,516, respectively.
On October 28, Yanan Shen, the co-founder and President of LI, said, “It took us 708 days to reach the production milestone of 100,000 Li ONEs, making us the fastest to achieve this among emerging NEV manufacturers in China. Our order intake exceeded 14,500 units in October, and we are working in earnest with our suppliers to fully restore the millimeter-wave radar supply, aiming to shorten the waiting time of delivery to our users.”
For its fiscal second quarter, ended June 30, 2021, LI’s gross profit increased 54.5% year-over-year to RMB952.8 million ($147.60 million). Its revenues increased 40.9% year-over-year to RMB5.04 billion ($780.40 million), while its operating cash flow increased 52% year-over-year to RMB1,407.60 million ($218 million). The company’s free cash flow increased 72.2% year-over-year to RMB982.10 million ($152.10 million).
Analysts expect LI’s EPS to increase 154.5% year-over-year to $0.06 in fiscal 2022. Its revenues are expected to increase 158.1% year-over-year to $3.76 billion in its fiscal 2021. Over the past six months, the stock has gained 63.9% in price to close yesterday’s trading session at $32.34. The stock soared more than 29% in price in October.
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TSLA shares were trading at $1,177.94 per share on Tuesday morning, down $30.65 (-2.54%). Year-to-date, TSLA has gained 66.93%, versus a 24.59% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...
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