In my view, investors should gradually accumulate some of the best EV stocks to buy now.

Electric vehicle stocks have taken a significant beating in 2022. The reasons for the correction include overvaluation, inflation, and other macroeconomic headwinds. The current year however seems to be a year of comeback and consolidation for EV stocks.

It’s worth noting that EV sales exceeded 10 million in 2022 with 14% of new car sales being electric vehicles. In 2020, only 5% of new car sales were EVs. Clearly, growth has been encouraging, and it’s likely to sustain.

Amidst economic challenges, 2.3 million EVs were sold in Q1 2023. On a year-on-year basis, EV sales accelerated by 25%.

With favourable government policies globally, the outlook remains bullish. It’s unlikely to be long before EV stocks make a strong comeback.

The correction presents an opportunity to consider some of the best EV stocks to buy. I believe the stocks discussed can easily double by 2025.

Li Auto (LI)

Li Auto (NASDAQ:LI) has been the best performing EV stock in the last one year. During this period, the stock has trended higher by 21% with most EV stocks being in a correction mode. The price action suggests undervaluation and I believe that LI stock will double in the next 24 months.

Several factors contributed to the rally for LI stock. First, the company’s deliveries growth has been stellar. For Q1 2023, Li Auto delivered 52,584 vehicles. On a year-on-year basis, deliveries surged by 65.8%. With the launch of multiple models, I expect deliveries growth to remain strong in 2023 and 2024.

It’s also worth noting that Li Auto reported vehicle margin of 19.8% for Q1. Even with inflation, margin has been robust and is superior to peers that include Nio (NYSE:NIO) and XPeng (NYSE:XPEV).

With healthy margins, Li also reported free cash flow of $975.9 million for Q1 2023. This would imply an annualized cash flow potential of $4 billion.

Panasonic Holdings (PCRFY)

Panasonic Holdings (OTCMKTS:PCRFY) stock has gained some momentum with a rally of 26% for year-to-date 2023. However, PCRFY stock is undervalued at a forward price-earnings ratio of 9.4. The stock also offers an attractive dividend yield of 2.05%.

One reason to like Panasonic is the company’s aggressive expansion plans. Currently, the company is contemplating a third battery plant in the United States at Oklahoma. Panasonic has begun construction of the second plant in Kansas in December 2022.

Another report suggests that Stellantis (NYSE:STLA) and BMW (OTCMKTS:BMWYY) are in talks with Panasonic for new EV battery plans. Besides this, Panasonic, and Toyota Motors (NYSE:TM) are looking for a new domestic manufacturing site in Japan. With these plans, they positioned Panasonic for growth.

Panasonic is also among the leaders in investing in innovation. The company is targeting a 20% boost in battery density by 2030. This will help in making batteries smaller and lighter.

Polestar Automotive (PSNY)

Polestar Automotive (NASDAQ:PSNY) stock has been in a sustained correction mode. At $3.3, PSNY stock seems massively undervalued.

Last year, Polestar delivered 51,491 cars and had guided for 60% year-on-year growth in deliveries in 2023. However, the company has revised the deliveries growth guidance in the range of 16% to 36%.

This has disappointed the markets and the stock has been punished.

I would, however, look at the positives when the stock is in the buying zone. Polestar launched two new cars, Polestar 3 and 4 in the SUV segment. Both these cars are now scheduled for mass production and deliveries in 2024. If macroeconomic conditions improve, the coming year is likely to be big for Polestar.

Another point to note is that Polestar had reported widening of EBITDA level losses in 2022. With economic challenges, the company has shifted focus on headcount reduction and boosting operating efficiencies. It’s likely that EBITDA losses will narrow in the coming quarters.

On the date of publication, Faisal Humayun did not hold (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.