Taking a Closer Look at the Electric Vehicle Market

At least once a day I wish that I had more hours in the day.

The real truth is that if I had more hours in a day, I would probably get involved in more things … and then need even more hours in a day.

Much to the dismay of my family, I have no problem spending all night going down a research rabbit hole and, at some point, tripping over our cat, making as much noise as humanly possible at an ungodly hour.

Then, days or weeks will go by, and I’ll completely forget about the thing I was obsessing about before.

Eventually, it pops back into my head. That’s exactly what happened this morning.

I sat down, opened my computer and realized I didn’t remember the last time I took a look at what was going on in the electric vehicle (EV) sector.

The last time that I got fixated on the subject, I found out that the first “heyday” of the electric car was in 1910.

At that time, electric cars accounted for a whopping third of all vehicles on the road.

But it didn’t take long for this percentage to shrink.

Ford Motor Co. (NYSE: F)’s mass-produced Model T was more affordable and widely available.

Combined with the discovery of cheap Texas crude oil, most of the electric cars on the road had disappeared by 1935.

Then, in the early 1970s, high gas prices would spur another round of interest in EVs, but the technology just wasn’t there to produce something to compete with the gas-powered counterparts.

Looking at the EV market in modern times, it’s easy to see that there’s now a demand for this type of vehicle, even though it’s still slow.

Companies all over the world are trying to compete with Tesla, Inc. (Nasdaq: TSLA), who still remains the dominant player in the United States. In China, the most dominant player is General Motors Co. (NYSE: GM).

In Europe, Renault just announced it wants to position itself to take a large piece of the fast-growing EV market there.

Given this excitement, I had to see what the Weiss Ratings was saying about all of these picks. First, let’s check with vehicle manufacturers.

First up is Tesla. It’s still one of the first companies that comes to mind in EV. The company currently trades around $600. Year to date, shares are down 14.5%.

That still doesn’t negate the fact that shares are up 253% over the past year. But, as I mentioned above, there are other companies looking to take market share from them.

Right now, Tesla has a solid “C” hold rating. Actually, since 2014, the Weiss Ratings has identified Tesla as a hold or sell.

Next up is General Motors. GM has made it clear that it’s on track to be 100% electric by 2035.

The company is aggressively working towards a commitment to 30 new global EVs by 2025. Shares are up 47.25% year to date and 117% in the past year.

The Weiss Ratings hasn’t identified GM as a company to buy since 2019, but that may soon change. The company was just recently upgraded from a “C” to a “C+.” One more upgrade will put it in the buy range.

While you might have already known about these bigger names, I bet there’re a number of smaller companies that might not even be on your radar.   

One example is Fisker Inc. (NYSE: FSR). Although I do like the way their cars look, the company is currently rated “D,” which is a sell, and shares are down 52% in the past three months.

How about companies that are powering the technology in these vehicles? One of those companies is Advance Micro Devices Inc (Nasdaq: AMD), a pick I’ve brought up before.

It’s a global semiconductor giant and its products are in everything from phones to cars to smart appliances to vehicles.

The company has maintained its buy rating since last September, and shares are up 50% in the past year. 

NVIDIA Corp. (Nasdaq: NVDA) is another company to watch. Although known for graphics processing units (GPUs) for gaming and PCs, the company was selected by NIO Ltd. (NYSE: NIO) to develop a new generation of automated driving electric vehicles.

Shares are up 84% in the past year, and the company recently got upgraded back into the buy range.

This isn’t even a complete list of companies that will see the benefits of this trend. There are companies that are focused on batteries, and on making sure there are enough charging stations. Those could also see huge profits moving forward.

If any of these picks pique your attention, I highly suggest you put them on your watchlist. You don’t want to miss out when it’s time to buy.

Best,

Kelly Green

About the Research Analyst

Kelly completed the Series 7 and 66 securities licenses, and has worked in the financial publishing industry for eight years, specializing in income and options. She contributes regularly to the Weiss Ratings Daily Briefing.

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