As always, the market has recently been abuzz with electric vehicle (EV) talk. Despite economic concerns, the EV market displays , surpassing 10 million sales in 2022 and another 35% jump projected by the end of 2023. EVs on the road are projected to cut global daily oil consumption by five million barrels daily by 2030. This guarantees EV’s growth as sustainability remains top-of-mind for consumers and government regulators.
But, as we’ve seen with in some EV sectors, certain companies are better positioned for the future than others. Investors bullish on EV’s future should focus on three core tenets: fundamental business model strength, financial stability, and market penetration. These three stocks meet those demands in spades and represent the best opportunity to capitalize on a growing industry.
General Motors (GM)
General Motors (NYSE:GM) is having a tough time this year; although the stock is only down 2% since January, it’s seen significant ups and downs in the past six months. The volatility and recent scared many investors away, and the stock collapsed 13% since July 31. But, with research firm EquitySet calling the stock and Morningstar’s estimate ranging closer to , this EV stock has a massive upside.
GM blew analyst estimates away in its recent . Notably, the report pledged an imminent improvement to electric vehicle margins, which bodes well for investors bullish on GM’s potential. Yet optimism abounds as GM fully embraces its EV-based future. GM estimates $225 billion in revenue by 2025, with a coming from EV offerings. GM is already the nation’s second-largest EV manufacturer, and the of the company’s Silverado EV, Blazer EV, and Equinox EV will further cement its position. However, GM isn’t above close collaboration with competitors. They recently with Tesla (NASDAQ:TSLA) and Ford (NYSE:F) to expand its national charging infrastructure.
ChargePoint (CHPT)
ChargePoint (NYSE:CHPT), the global leader in EV charging networks, has been on a 20% losing streak since January.
However, this company’s position is unique in the growing EV market. Today, 46% of national are ChargePoint-owned and operated, with more to come as the market expands.
Industry experts project charging station demand will , representing massive potential expansion for ChargePoint solutions. The company has proven it has the financial prowess to withstand short-term volatility in the meantime. Its recent marked a whopping 60% year-over-year (YOY) sales growth, with gross margin climbing up to 23% from last year’s 15%. Likewise, the company retains a healthy cash balance. That gives ChargePoint flexibility to allocate to expansion or serve as a buffer for unforeseen industry turbulence.
Ultimately, ChargePoint’s value comes from being one of the first movers in widespread EV charging infrastructure development. CHPT’s portfolio spans highway gas stations, parking areas, corporate buildings, airports, and more. This diversity and penetration cements its position and ensures its longevity in the EV industry.
Tesla (TSLA)
Of course, it’s impossible to lay out an honest list of the best EV opportunities without mentioning Tesla (NASDAQ:TSLA). Even when addressing other strong EV stocks, like GM and ChargePoint, you will end up mentioning Tesla (even if indirectly). Tesla’s charging network rounds out the remainder after ChargePoint’s share, with their stations comprising more than of the national charging stations. Even GM’s EV success is partially contingent on strategic partnerships with Tesla.
Tesla’s stock is continually rising, returning 140% since January and inflicting more than for short sellers. Beyond its dominant position, investors are excited about the upcoming , slated for rollout within weeks. With its unique look and feel, the Cybertruck sightings generated considerable online excitement and promotional buzz. At the same time, Tesla is gearing up to unveil the , code-named “Highland” in China. Management expects new model production to kick off in September.
Ultimately, with a , Tesla is the EV stock to buy if you’re forced to choose between alternatives.
On the date of publication, Jeremy Flint held a long position in GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
