While 2020 will go down in history as the year of the coronavirus, it will be known to investors as the year the electric vehicle (EV) revolution started. As many traditional companies struggled during the pandemic, investors began to put their money into stay-at-home and EV stocks. It also didn’t hurt that the general public, the government, and many corporations are pushing for cleaner energy initiatives.

Although Tesla (TSLA) has been around for a while, it’s stock took off this year, up 579.8% as of Wednesday’s close. TSLA was joined by Chinese EV maker NIO Inc. (NIO), which is up almost twice as much as TSLA (1,093.5%) and generated buzz for the industry. While these companies seem to be getting all the press, many smaller companies have entered the fray as well. The entire industry has been a boon to many investors, with the Global X Autonomous & Electric Vehicles ETF (DRIV) up 50.5% year to date. Part of the popularity is that electric vehicles are finally becoming a realistic option for the general population, not just the wealthy.

And if you’re looking for popular stocks, the Robinhood 100 is the place to go. Robinhood serves over 12 million customers, with an average age of 31. The company publishes a list containing the top 100 popular stocks held by their customers. So, I thought it would be interesting to take a look at EV stocks on that list and determine if they are good investments to consider in December. While the sky-high gains of EV stocks might not be sustainable over the long-run, the industry’s potential is quite real, and top EV stocks still have room to run over the near term. This is why I am highlighting TSLA, NIO, and General Motors Company (GM).

Tesla, Inc. (TSLA)

You may have noticed that shares of TSLA plummeted Wednesday morning by 7.4% after a tweet Monday night from noted The Big Short investor Michael Burry. The former hedge fund manager said he is currently shorting TSLA stock. The stock rebounded to finish the day at 2.7% and was up 3% in after-hours trading. While Burry believes that TSLA is overvalued, shorting the stock can be quite risky, as it has proven time and time again that its momentum will push the stock higher.

TSLA soared 46.3% last month, with news that the company would finally be included in the S&P 500 index. When a stock is added to a major index, all of the index funds and ETFs that track the index have to buy the company’s shares to stay current. TSLA will be added to the index before the market opens on December 21.

The stock was also driven higher by its stellar third-quarter results in October. The company posted a 44% year-over-year growth in vehicle deliveries in the quarter. In addition, it also expanded its production capacity from 440,000 units last year to 840,000 units at the end of the quarter. The expansion is to support Model 3 sales and increased production for the new Model Y.

Even at a high valuation, the stock’s risk/reward is favorable based on near and long-term growth drivers. TSLA is rated a “Strong Buy” in our POWR Ratings system. It also holds the honor of not only having a grade of “A” in every component that makes up the POWR Ratings, but it is also the #1 ranked stocks in the Auto & Vehicle Manufacturers industry.

NIO Inc. (NIO)

Similar to TSLA, NIO also opened sharply lower on Wednesday morning. The company was one of many EV stocks to fall on news of a disappointing partnership deal for Nikola (NKLA) and a report accusing Kandi Technologies (KNDI) of falsifying their revenues by Hindenburg Research. The stock was able to recover, though, and finished the day up 5.8% after the company reported that it delivered 5,291 vehicles to customers in November. This was more than double its total from a year ago.

NIO is seeing strong demand for all three of its electric SUV models. It is now planning to boost its monthly production to 7,500 vehicles. This led Goldman Sachs analyst Fei Fang to upgrade the stock to “Neutral” from “Sell.” Fang also raised the bank’s target price from $7.70 to $59. The analyst upgraded the stock due to the company’s batteries-as-a-service (BAAS) program’s growth potential.

The company’s efforts to increase the range on its models and China’s incentive program for EV buyers also factored into the upgrade. The company is also well-positioned in the rapidly growing EV industry due to rising demand for its ES6 and ES8 models, which are driving top-line growth. Its latest model, the EC6, should drive additional revenue.

The stock is rated a “Buy” in our POWR Ratings system. It holds a grade of “A” for Trade Grade and Peer Grade and a “B” for Industry Rank. NIO is also the #14 ranked stock in the China industry. While I see future near-term gains for the stock, approach cautiously as the House just passed the Holding Foreign Companies Accountable Act, which could lead to the delisting of China stocks such as NIO.

General Motors Company (GM)

For investors cautious about high-flying EV stocks with unsustainable valuations, U.S. automobile stalwart GM is the stock for you. Unlike some of its EV peers, GM has been generating earnings and profits for a long time. The company generated over $4 billion of net income in the third quarter.

The company’s growth path going forward is its hot-selling SUVs, the Chevrolet Silverado and Equinox, and its upcoming EV launches of the GMC Hummer and Cadillac Lyriq. GM plans to spend $27 billion over the next five years on electric and autonomous vehicles. The plan is to launch 30 EVs globally by 2025, with more than two-thirds available in North America. All of the company’s major brands will have models available.

GM’s EV plan is contingent on its Ultium battery technology. The company expects its next-generation Ultium batteries to double the energy density of today’s batteries at half the cost. In addition to EVs, GM has been working on driver assistance systems. According to Consumer Reports, GM’s Super Cruise system was not only the best system but also outperformed TSLA by a wide margin, especially in areas such as keeping the driver engaged.

Even though GM may not have the same cache as TSLA and NIO this year, the stock is still up 23.3% year to date. Plus, the stock is rated a “Strong Buy” in our POWR Ratings system. Similar to TSLA, GM has “A” grades in every POWR component. It is also the #3 ranked stock in the Auto & Vehicle Manufacturers industry.

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TSLA shares . Year-to-date, TSLA has gained 579.87%, versus a 15.60% rise in the benchmark S&P 500 index during the same period.

About the Author: David Cohne

David Cohne has 20 years of experience as an investment analyst and writer. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers. More...

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