Other than Tesla, what other electric car company stocks can I watch?
The US stock Tesla Motors should be an absolute superstar this year. Although Tesla's stock price has declined recently, there is no doubt about the huge increase in Tesla stock.
Judging from the past year, Tesla's stock price has increased about 10 times, which is a standard 10X stock described by famous American investment master Peter Lynch. Moreover, the company also complies with the stock selection criteria mentioned by Lynch in his “Defeating Wall Street”: well-known, invest in companies you are familiar with. This is also what I have observed myself. Whether on the streets of New York or Los Angeles, or in the domestic first-tier cities north, there are already more and more Tesla cars.
So, in addition to Tesla, what other electric vehicle companies can pay attention to in this sector? This article would like to share and summarize other electric vehicle sector companies in the US stock market, including electric vehicles in China Securities, for everyone to discuss.
01 Tesla
(Tesla logo, image source network)
When it comes to electric cars, let's first take a look at what's going on with Tesla cars. Tesla (Tesla, trading code is TSLA) is the godfather of the electric vehicle industry and is likely to become the hegemon of the global automotive industry in the future. Therefore, this company should be one of the best stocks to buy electric cars. Data as of 2019 shows that Tesla controls about 16% of the global passenger car market. Thanks to new vehicles and geographical expansion, this figure is up from 8% in 2017. These two drivers will remain the same for years to come. Tesla will launch the Model Y this year, followed by an electric truck. Meanwhile, the company will continue to expand into Europe, lead the market position in China, and eventually enter Latin America.
(Tesla Motors, image source network)
Against the backdrop of all this growth, Tesla will continue to produce the best cars in the industry, as Tesla has a huge lead in battery technology and autonomous driving. Meanwhile, Tesla's brand assets are second to none. Strong brand assets won't be diluted in the short term. Over the next few years, Tesla will continue to be the unrivaled leader in the consumer electric vehicle market. Of course, for Tesla stock investors, the biggest problem is valuation. The current market value of the company has exceeded 390 billion US dollars. The corresponding current P/E is about 930 times, and the corresponding expected profit P/E is about 116 times. The ratio of the company's market capitalization to sales revenue is slightly more than 14 times. Judging from various indicators, the company's valuation is indeed extremely high, so once market sentiment fluctuates, such as recent disappointment with Battery Day (Battery Day), the stock price will plummet.
02 Wall Street's controversial electric truck company Nicola
This year Nikola Motors (NKLA) is Wall Street's much-questioned newly-listed electric truck company. The company debuted in early June through a reverse merger. Within a few days, NKLA's stock price soared from $30 to $90. This company is on par with Tesla in many ways. The company name is the name adopted by the great inventor Nikola Tesla. In short, it is leading the way in creating a new type of futuristic, zero-emission, and cost-effective truck. The company intends to first use electric and hydrogen transport trucks to serve the commercial trucking market, and then electric and hydrogen transport trucks to serve the consumer car market.
(“Nikola Two”) (Nikola Two), Source Network)
If the company successfully seizes the opportunity to completely disrupt the trucking industry, and the company should be able to receive significant support, technical advantages, strategic partnerships, and a leading position in the hydrogen energy market, then the company's stock price is likely to soar. The company's partner agency and majority shareholder is General Motors (GM), and the management also includes some former executives from GM. Of course, questions about Nikola cars have always been heard. The founder of the company recently left his job abruptly. The company's stock price has also fallen sharply, and its market value has fallen by more than 50%. Next, the innovation and development of electric trucks and hydrogen energy trucks, as well as GM's participation and positioning in Nicola, will have an extremely important impact on the company's development.
03 Electric tricycle company Archimoto
The electric vehicle market in the US stock market this year has a very special small company that produces electric tricycles: Arcimoto (Arcimoto, trading code: FUV). Archimoto manufactures three-wheeled electric vehicles. The company believes the future of cars could have three wheels. Its bet is that three-wheeled electric vehicles have enough special use cases around the world, and demand for these smaller, more flexible, and cheaper vehicles will be strong.
(Electric tricycle company: Archimoto products, photo credit: insideevs.com)
Specifically, Archimoto's current consumer product is called a utility vehicle (FUV), which looks a lot like the next generation of American outdoor sports ATVs. It has great potential to become the preferred means of transportation in large cities. At the same time, the company is also promoting business-oriented products, namely deliverers (deliverers) and rapid responders (rapid responders). The Deliverer is a three-wheeled compact electric vehicle designed to optimize last-mile delivery logistics by increasing speed and reducing costs. The Fast Responder is a three-wheeled compact emergency electric vehicle designed to enable law enforcement, security, and emergency services to respond faster and more economically to incidents.
Delivery of the FUV began at the end of 2019. Production of commercial vehicles will begin at the end of 2020. The company is headquartered in Oregon and currently has a market capitalization of only 200 million US dollars. The stock price has more than tripled since this year. The author believes that this company is still very small and is in a losing phase. However, the markets they are developing have huge potential, both consumer markets and commercial markets. Investors can keep watching.
04 NIO Auto
Wall Street began treating NIO as China's Tesla this year. After the company was listed on the New York Stock Exchange in September 2018, the stock price fluctuated greatly. Last year in particular, the company faced numerous questions about sales volume, profit, cash reserves, etc. At its lowest, the stock price fell below $3 at the end of 2019. But by 2020, everything had changed. First, there is the general environment. China's automobile market is rebounding, and automobile sales recorded positive growth for the first time in 21 months in April 2020. Electric vehicle sales in China have once again hit a new monthly high. NIO's car deliveries doubled in March and April, and are expected to continue growing in the second half of the year. The company's adjusted net loss for the first quarter narrowed by more than 40%. The amount of financing from a group of strategic investors on the balance sheet was 7 billion yuan.
(NIO Auto, photo source: NIO Auto official website)
Wall Street believes these favorable trends will continue for the next few years. The domestic urbanization process will drive sales growth in the automobile market. Increased consumer awareness, falling prices, expansion of charging infrastructure, and government support will also drive growth in electric vehicle sales in China. As a result, NIO Auto's stock price has risen nearly 6 times this year, and its market capitalization has already surpassed 22 billion US dollars.
05 The ideal car
(Ideal Auto ONE, image source: Ideal Auto official website)
Ideal Auto was founded in 2015 and unlike most other electric vehicle manufacturers, Ideal Auto focuses on so-called extended range electric vehicles (eREVs), which can be powered by electricity or gasoline. Hybrid engines make up for China's sparse electric vehicle charging infrastructure and better rid consumers of gasoline-powered cars. Since producing the first model in late 2019, the company has sold around 10,000 units. The company has automobile manufacturing, engineering and design services in Changzhou City, Jiangsu Province, and its headquarters and R&D facilities are located in Beijing. In July of this year, Ideal Auto raised $1.1 billion in an initial public offering (IPO) on NASDAQ, valuing the 5-year-old electric car maker at around $10 billion.
Wall Street appreciates that the company is supported by Meituan, China's largest consumer service app company, and Today's Headline, believing that the next batch will attract a large number of young users. The company's current market capitalization is 13 billion US dollars, and it is also a popular stock listed by China Securities this year.
06 Xiaopeng Motors
(Xiaopeng Motor CEO He Xiaopeng and Xiaopeng P7, source: Xiaopeng Motor's official website)
The latest Chinese electric vehicle company to go public on Wall Street this year is Xiaopeng Motors. The company was founded in Guangzhou, and the founder team included some former GAC Group executives. Investors include well-known Chinese and international investors Alibaba, Xiaomi, Foxconn, and IDG Capital. On August 27 of this year, just over a month ago, Xiaopeng Motor was listed on the New York Stock Exchange at an issue price of 15 US dollars, and its stock price rose by more than 40% on the first day of listing. The 6-year-old electric car maker is currently worth close to $15 billion. It can be said that as the last company among China's three new electric vehicles to be listed in the US, Xiaopeng Motors is also attracting investors' attention.
The author learned that many of the US investors participating in the subscription were established large institutional investors. Investment in Xiaopeng shares by these institutions is a track-style investment that is optimistic about China's long-term development and in the electric vehicle sector. It can be said that with China Securities currently being pressured by many negative comments in the media, the successful listing of Xiaopeng Motor is very positive.
Other ways to invest in automotive innovation
And when it comes to innovation in the automotive industry, Google's driverless technology subsidiary Waymo is also an extremely important company. Waymo currently has the only fully autonomous autonomous vehicle technology in the US and the world. The company announced the first round of external financing of 2.25 billion US dollars in May this year, and the company's valuation has already exceeded 30 billion US dollars. On June 25, Waymo announced a partnership with Volvo to integrate Waymo's autonomous driving technology into their cars. Of course, for ordinary investors, they cannot directly invest in Waymo; they can only participate by investing indirectly in Google's shares.
In addition to automotive electric vehicle manufacturers, everyone can also pay attention to electric vehicle parts companies. For example, Kandi Technologies (NASDAQ: KNDI). This company is one of many electric vehicle manufacturers and parts suppliers around the world.
(Google subsidiary Waymo autonomous vehicle, photo credit: Wired)
Investing in individual electric vehicle stocks may have many single-factor risks, so everyone can also participate in the development of the electric vehicle industry through the investment sector. For example, the US stock market has a future travel ETF (trading code KARS), which covers many electric vehicles, battery companies, navigation system companies, etc. This ETF has risen nearly 30% in the past year, significantly surpassing the S&P 500's 5% increase over the same period. Electric vehicle sales in the US increased 36% this year. I believe that with the development of the industry, the market share of electric vehicles will continue to rise. Over the next decade, this transformation will only accelerate as battery technology improves, battery charging infrastructure expands, core consumer demand grows, vehicle production capacity shifts, battery and electric vehicle prices fall, and public and private pressure to cut carbon emissions.
Today, electric cars only account for 3% of the market share of all passenger cars. The author believes that this once-in-a-lifetime transportation revolution may eventually make electric vehicles fully popular by the end of this century. The industry will continue to grow, and investment opportunities will continue to be presented to us!
Author: Chen Kaifeng
