Electric vehicle stocks: Buy, sell or shift to neutral?
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The electric vehicle sector starts the second half of the year in need of a hard reboot after the Green Tidal Wave thesis hit potholes this year that included supply chain disruption, commodity price shocks, chip shortages, labor pressure, and a valuation reset with interest rates spiking.
The big drops seen in the EV sector during the first half of 2022 included Embark (EMBK) -94%, Hellbiz (HLBZ) -88%, Volcon (VLCN) -84%, Aurora Innovation (AUR) -83%, Volta (VLTA) -82%, TuSimple (TSP) -80%, Mullen Automotive (MULN) -79%, Arrival (ARVL) -79%, Canoo (GOEV) -76%, Rivian Automotive (RIVN) -75%, Cenntro Electric Group (CENN) -71%, Sono Group (SEV) -69%, Ouster (OUST) -69%, GreenPower Motors Company (GP) -67%, Luminar Technologies (LAZR) -64%, and QuantumScape (QS) -61%.
Looking ahead, the automobile industry as a whole is expected to see more supply chain disruptions and constraints in the near-term that could pressure inventory tightness into 2023 and drag on sales. EV startups face even tougher commodities and labor than OEM majors who have the benefit of scale.
Amid the share price bruising and negative vibe, some analysts are looking out all the way to 2023 for a recovery when inflation is expected to be improved and EV demand strong.
Tesla (TSLA) is still widely seen as sitting in a strong position. "While the softer macro will clearly impact demand around the edges the coming quarters, we believe Tesla has ample demand capacity to hit ~2 million units in 2023 globally with production capacity that can exceed this number when factoring in Austin and Berlin to a normalized China production target," updated Wedbush Securities analyst Dan Ives.
In China, the latest round of deliveries reports came in strong with weekly sales returning to the peak levels seen last December. XPeng (XPEV) +133% Y/Y, Li Auto (NASDAQ:LI) +68% Y/Y, and Nio (NIO) +60% all moved past the COVID disruption of the last few months to return to strong deliveries growth. However, the zero-COVID policy wildcard from Beijing has held back investor enthusiasm and could be a factor again in the back half of the year.
There have also been some general developments in the background supportive of the EV sector. Electrify America announced that Siemens was investing more than $100M into the company and its EV charging network. Volkswagen (OTCPK:VLKAF) is also increasing its original commitment to Electrify America. Meanwhile, the European Union agreed to a framework to eliminate carbon emissions from new cars and vans by 2035, effectively closing the chapter on the internal combustion engine.
EV stocks with consensus buy recommendations from both Wall Street analysts and Seeking Alpha authors include Ouster (OUST), Aeva Technologies (AEVA), Innoviz Technologies (INVZ), Beam Global (BEEM), Wallbox N.V. (WBX) and Workhorse Group (WKHS).
The electric vehicle stocks with the highest Seeking Alpha Quant Ratings are Li Auto (LI) 3.41, Tesla (TSLA) 3.32, Lucid Group 3.01, Ayro (AYRO) 3.00, and XPeng (XPEV) 2.95.
Meanwhile, the Seeking Alpha Quant Rating is flashing Strong Sell on AEye (LIDR), Arcimoto (FUV), Faraday Future Intelligent Electric (FFIE) and Allego N.V. (ALLG).
Add your own EV stock picks for investors to buy or avoid in the comment stream.
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Comments (76)
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The federal governments lacks a strategic plan, and tries to “control” too much. Ideology/polices will bankrupt many business within the year, if they wait for federal support for their business.
Too many challenges for everyone, and we have too much negative comments from parties.
Let’s regroup and refocus on the needs of our economy, tell the American people we tried to transition too fast, and will open up the natural gas pipelines, and relax the gas production, for the safety of the US and our Allies.Since Europe is preparing for the winter season, they need our support and products. I would rather see US dollars spent on our products, instead of Saudia Arabia, Russia, Venezuela, and others, and lower the cost of Brent crude, to stabilize the global economies, and assure Europe, we have your back. We must control our own destiny until we can transition over time to new renewable energy, keep inflation in tact, allow family’s businesses, to regain confidence in DC. Just a rational adult who has lived through before during the NIXON/CARTER era. We do not need gas rationing, food shortages, high crime, runaway inflation, skilled worker shortages, and price controls. We are one of the greatest countries in the world, but act and operate like a country following others leadership. It’s time to take the “Bull by the Horns” and solve our problems first, and stop blaming others for our lack of LEADERSHIP in DC.
how about some remedies
Li L9 about 110miles pure ev range. 683 miles combined range. Best of both worlds.
Comparing you tube vids between Tesla and Rivian assembly lines is striking. Lots of humans in the Rivian vid... not sure if that is a good thing when it comes to production costs.
Automotive history tells us that avoiding bankruptcy is damn near impossible for USA auto makers. That is not a joke, just a fact.
I give Aptera a chance of surviving as they may be able to create a sizable niche market in the sun belt. Current fuel costs will make an odd looking 3 wheeler more attractive and up to 40 miles of free fuel a day certainly helps. They have not gone public yet but an IPO will be coming soon. https://aptera.us