Electric vehicles had a record year in 2020, with consumers spending $120 billion on electric car purchases — a 50% increase from 2019. The numbers for 2021 are projected to eclipse those figures handsomely when the data is computed.
Several players currently dominate this market. However, some up-and-coming names should be on your radar too. Indeed, we may be nearing a tipping point, with electric vehicles positioned for exponential growth.
Based on projections for 2030 to 2035, now is the time to invest in electric vehicle stocks, especially if you’re a long-term investor. Here are three top EV stocks to buy now and hold for the next decade.
As the premier electric vehicle manufacturer and a clean energy company, Tesla (NASDAQ: TSLA) leads the transition towards sustainable energy and high-performance electric cars. Last year, the company manufactured nearly one million vehicles, and has intentions to sell 20 million electric vehicles a year by 2030. Some see this goal as a reach, but not Elon Musk — and investors should be receptive.
Although Tesla stock has had a rocky road recently, it is still up by more than 20% over the past year. Still, the valuation is not cheap. Sure, there is plenty of anticipated growth ahead but if history is a guide the upward trajectory will be peppered with volatility.
A tailwind for Tesla is that it has achieved profitability for ten consecutive quarters, a remarkable feat for such a relatively new car manufacturer.
Another plus when investing in Tesla? You may also benefit from other projects under the Tesla hood. Elon Musk is not satisfied with Tesla simply being an electric vehicle manufacturer. Whether autonomously driving cars or renewable energy stations, Musk has plenty of ideas to help the company sustain long-term growth through cutting-edge innovation.
And while many believe, at its current valuation, the price of TSLA is too steep, there is no denying that Tesla is a one-of-a-kind company with a visionary CEO. For the brave investor who can stomach 50% drawdowns, expect to be rewarded long-term as the future is likely to look very much like the past.
You may not be familiar with Rivian (NASDAQ: RIVN). However, this company is among a short-list of competitors that could cut the gap between Tesla and its rivals.
RIVN only went public on November 10, 2021, at an IPO price of $78.00. The company raised $12 billion. Since then, as of March 1, 2022, it has declined by over 39%. The stock’s low is $50.00, and its high was $179.47. The recent decline enticed several billionaire investors to become shareholders, including Philippe Laffont, George Soros, and Dan Loeb.
If you plan to buy and hold for at least the next decade, RIVN is an attractive investment. Unlike Tesla, which mainly focuses on crossover SUVs and sedans, Rivian focuses on commercial vans, SUVs, and trucks. By focusing on these market segments, it can stand apart from other market leaders. Commercial delivery vans will largely go to Amazon, which has ordered up to 100,000. The first 10,000 will hit the road by the end of 2022.
Although there was some negative news surrounding Rivian’s $5 billion manufacturing expansion project, which faces opposition from local Georgia residents, the company successfully produced its R1T pickup last year. It was named the MotorTrend 2022 Truck of the Year.
Even though the company did not hit its delivery target of 1,200 (it produced 1,015), production has now quadrupled to 200 vehicles a week, compared to 50 previously. If Rivian’s plant in Georgia is successful, it will have the capacity to produce 400,000 vehicles per year.
QuantumScape (NASDAQ: QS) is the wild card here because it is still pre-revenue. However, this start-up is showing promise and might be one you’ll want to keep an eye on. Unlike the previous two companies, QuantumScape isn’t in the car manufacturing business. Instead, it is on “a mission to transform energy storage” through solid-state lithium metal batteries.
QuantumScape is developing a new lithium battery, which can recharge to 80% capacity in under 15 minutes. With the technology that’s currently available, that goal has not yet been reached. But based on this design, it looks like QuantumScape will be able to meet or even exceed that objective.
QS share price has been declining, down from its 52-week high of $65.42 and with good reasons. The first is that Solid Power went public in December, which may put pressure on QS, and the second is fear of rising inflation. The unknowns surrounding rate hikes this upcoming year have hurt richly valued, futuristic stocks like QS.
In spite of the concerns, Volkswagon backed QuantumScape to the tune of $100 million. Commercial production is not expected until around 2024 or 2025. At this time, QS may seem risky. However, at its current price, QS could make up a small portion of your long-term holdings, yet offer significant returns in the years to come.