In 2023, electric vehicle sales surpassed 1 million units.
But, the past few months showed lower production, slowing demand, and reduced EV investments. Despite macroeconomic challenges, certain EV stocks performed well at year’s end.
The EV industry, seen as a lucrative future investment, stands out due to its relative newness. Compare it to mature markets like personal computing and traditional automobiles that have longevity.
Three EV stocks, in particular, have upcoming catalysts you shouldn’t miss out on. Notably, each of these stocks is prevalent in the high-growth Chinese EV market. For those looking on investing in this space, and believe electrification is a global trend, watch these three stocks closely.
Li Auto (LI)
Li Auto (NASDAQ:LI) maintains its impressive growth trajectory, solidifying its position as a formidable player. In fact, November saw a remarkable surge, with deliveries reaching 41,030 vehicles, marking a 172.9% year-over-year (YOY) increase. Additionally, Q3 revenue soared to $4.61 billion, reflecting a remarkable 271% YOY growth.
Li Auto, already a compelling investment, adds another reason to buy. The imminent mass production of its first fully electric car, the MEGA MPV, will start in February. Therefore, this shift from hybrid-style vehicles indicates Li Auto’s strategic move. Previewed at the 21st Guangzhou International Automobile Exhibition, the MEGA MPV garnered over 10,000 orders within two hours of reservations opening.
Showroom models were available in January 2024. Also, Li Auto claims the MEGA MPV can cover 500 kilometers (310 miles) on a 12-minute charge. Therefore, anticipate exciting developments in Li Auto’s growth story with MEGA deliveries commencing in February.
Nio (NIO)
Despite a challenging 2023, Chinese EV manufacturer Nio (NYSE:NIO) received a boost. A $2.2 billion investment from CYVN Holdings sent its stock up 12%. CYVN now holds 20% of Nio, resolving concerns about the company’s capital needs for future growth.
NIO showcased robust performance in December 2023, delivering 18,012 vehicles, a 13.9% YOY increase. Also, the fourth quarter saw 50,045 deliveries, a 25% jump from the previous year. Investors might find potential long-term gains in NIO’s dynamic EV market presence.
While skeptics highlight NIO’s cash burn and potential shareholder dilution, others see promise in the ET9 luxury vehicle. With cutting-edge features and battery-swapping technology, the ET9 aims to challenge Tesla in the high-end market. The company may potentially reshape perceptions and offer investors a unique opportunity.
BYD Co. (BYDDF)
Founded in 1995 by Wang Chuanfu, BYD Co. (OTCMKTS:BYDDF) is China’s leading EV producer.
Unlike Tesla, the company exports EVs globally, specializing in electric taxis, buses, and hybrids. BYD’s major overseas markets include Israel and Thailand, where it dominates EV sales with popular models like Qin and Song.
In a pivotal development, BYDDF achieved a historic milestone, surpassing Nissan in monthly sales for the first time. Fueled by the strong adoption of EVs in China, BYDDF recorded an impressive 301,833 unit sales in October. The ongoing growth trend in China’s EV market and the anticipated 4% expansion of the country’s economy position BYDDF for sustained sales momentum.
With a robust return on invested capital at 11.26%, BYD Co. demonstrates a competitive advantage. Specifically, it requires minimal capital for business monetization. Additionally, a noteworthy return on equity at 23.7% reflects the considerable value delivered to equity investors.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
