In the competitive EV industry, 2023 marked a decisive year, separating winning EV stocks from laggards. I think the bullish outlook for this sector extends beyond next year, with plenty of upside potential on the horizon, driven by innovation and sustained industry growth.
While the growth rate of the electric vehicle industry has slowed, it remains dynamic. Governments worldwide aim to boost EV adoption, and many companies are transitioning to electric vehicles. Amidst fierce competition, several EV manufacturers thrive.
Positive global EV adoption trends position these companies as industry leaders, making them strong long-term investments. So here are the best EV stocks to consider.
Li Auto (LI)
In Q3 2023, Li Auto (NASDAQ:LI) achieved a remarkable 271.6% year-over-year revenue growth, reaching $4.6 billion, with a 21.2% vehicle gross margin and robust $1.8 billion free cash flow. Bolstered by $12.13 billion in cash, the company is positioned for aggressive expansion and ongoing R&D efforts, introducing successful models like the LI MEGA, with over 10,000 orders in two hours. Commercial deliveries start in February 2024, signaling strong growth. As cash flows rise, LI stock is poised for positive momentum.
Li Auto, favored by Chinese families for its electric vehicles, intensified efforts to create in-house automotive chips, recruiting talent globally. It posted notices on LinkedIn on November 21, seeking candidates in Singapore for roles developing silicon carbide power modules.
The company’s success hinges on its coveted vehicle lineup, with high demand, especially for best-sellers in China. The recent debut of Li MEGA at Guangzhou 2023 and plans for an expanded product range make it an attractive prospect. Analysts from Bank of America and Barclays raised price targets, with LI standing out as a top pick in the EV market.
In a thriving Chinese electric car market, BYD (OTCMKTS:BYDDF) outpaces global growth, buoyed by government subsidies. Recent data indicates BYD surpassing Tesla (NASDAQ:TSLA) in electric vehicle deliveries over the past three months. While domestic sales drive growth, exports, constituting 10% in October, are on the rise. Though not yet a threat to Western car makers, BYD’s export momentum signals potential global market expansion.
BYD’s pricing strategy, exemplified by the affordable BYD Dolphin in the UK and the budget-friendly Seagull hatchback in China, addresses the cost barrier in the electric car market. The Blade battery, offering a 376-mile range and quick recharge, enhances BYD’s appeal. The company expands globally with investments in sales and servicing branches, planning to add 16 branches in Britain. Potential challenges in the EU might be mitigated by reported plans for manufacturing plants in Hungary and the US.
In other BYD news, the company marked a historic achievement with the production of its 6 millionth new energy vehicle at the Zhengzhou factory. Surpassing this milestone in just three months after the 5 millionth, BYD continues to set rapid benchmarks in production and sales, celebrating the occasion with the unveiling of the BAO 5, a super hybrid SUV under the FANGCHENGBAO sub-brand. This gives investors more reason to buy the stock now for optimal growth.
Surge Battery Metals (NILIF)
We’ll need lithium if we move into a world with electric vehicles taking the reins from internal combustion automobiles. A lot of lithium.
That’s where Surge Battery Metals (OTCMKTS:NILIF) comes in. The company is among the leading prospective lithium miners in North America, with a massive potential project in Nevada that’s flying under the radar.
Surge has submitted an Exploration Plan of Operations and Reclamation Plan Permit Application for its high-grade lithium clay discovery at Nevada North. The project, located in Elko County, demonstrated significant lithium-bearing clays during the 2022 drilling, with the 2023 program aiming to extend the strike length to over 11,480 feet, awaiting full assay results.
The company recently submitted an Exploration Plan of Operations (EPO) that allows for a potential disturbance of up to 250 acres, a significant increase from the existing five-acre authorization. Pending approval, this milestone will enable in-fill and step-out drilling to refine the mineral resource area and explore expansion possibilities. The outcomes will contribute to an updated mineral resource assessment and support further economic studies. This makes it one of those EV stocks to put on your watchlist.
Surge Battery Metals secured regulatory approval for an option deal with M3 Metals Corp, offering the potential acquisition of a 20% interest in M3M Lands via $250,000, 2,000,000 common shares, and a $250,000 exploration investment. An additional 10% interest was possible with $500,000 and 1,000,000 more common shares. These deposits provide investors with a high-beta option amid the growing demand for lithium in the electrification trend.
On the date of publication, Chris MacDonald did not have (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.