The 3 Hottest EV Stocks to Watch in 2024

Stocks to buy

The world is rapidly transitioning towards electrification, and the sales of battery-electric vehicles in the country hit over the 1 million mark in 2023 but the last few months saw a slowing demand. The year ended with low demand, lower production, and companies cutting down on their EV investments. This could be due to several macroeconomic factors like high interest rates, lower consumer spending, the ongoing holiday season, and companies delaying the rollout of new EV models. But there are some hot EV stocks that ended the year right. 

While EV sales have increased year over year and surpassed one million, they are not growing as fast as expected. But you can use this period of slowdown to load up on EV stocks that show long-term growth potential. EVs are going to become mainstream, and they are here to stay. If you want to make the most of the drop in EV stocks, here are the three hot EV stocks to watch in 2024. 

Li Auto (LI)

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I think 2024 will be the year for Li Auto (NASDAQ:LI). It ended 2023 on an excellent note and this momentum is set to continue in the new year. It is one of the hottest EV stocks to watch. One of the top Chinese EV makers, Li Auto steadily grew deliveries and reported impressive financials quarter after quarter. It delivered 50,353 vehicles in December and achieved 131,805 deliveries in the fourth quarter, up 184.6% year over year. 

It has also managed to achieve the full-year target of 376,030 deliveries and beat the fourth-quarter delivery projections. Li Auto aimed to achieve deliveries between 125,000 and 128,000 in the quarter but it achieved much more than that. This means the financials will also be stellar.

With Li, there is a lot to look forward to. The company will begin deliveries of Li Mega in March, and it will be interesting to see how the market reacts to it. Additionally, its fourth-quarter results could be stellar and it could continue the high momentum. 

I feel Li Auto has a long way to go, and if the company decides to expand into other countries, there will be no stopping its growth. Li has a range of cars that meet the needs of consumers, and while the overall EV demand is slowing, Li has been steadily growing its deliveries each month. 

Trading at $37 today, LI stock is highly undervalued and one of the hottest EV stocks to own. While it is up 78% year to date, it has the potential to hit the 52-week high of $47 in the coming months. This is one stock that can double your money in 2024. 

General Motors (GM)

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General Motors (NYSE:GM) has had a tough time due to the workers’ strike and it cost about $1.1 billion in operating profit due to a production loss. However, the company is ready to bounce back in 2024. It has reinstated the guidance after taking into account the loss caused by the strike and aims to report a net income ranging between $9.1 billion to $9.7 billion, lower than the previous range of $9.3 billion to $10.7 billion. It also expects an EPS in the range of $7.20 to $7.70. 

This could be a temporary setback for the company, but there is a lot to look forward to. General Motors saw its deliveries increase 21% year over year in the third quarter to hit 674,336. Notably, it delivered more than 20,000 EVs in the third quarter and has also unveiled a $10 billion stock buyback program which has boosted investors’ confidence. 

Fundamentally, the company isn’t in a bad space either. It reported a revenue of $44.13 billion in the quarter, and the EPS came in at $2.28. The management will be focusing on EVs and aims to increase the output in 2024.

The EV stock is currently trading for $36, lower than Li Auto despite having a solid history, strong performance, and a wide range of products. It is highly overlooked, and now is a good chance to add it to your portfolio. You can see at least a 50% upside from the current level. The analysts at TipRanks have an average price target of $45.91 and a high price target of $95. Out of the 19 analysts, 14 have a buy rating.

Tesla (TSLA)

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It is not possible to talk about EV stocks without mentioning Tesla (NASDAQ:TSLA). The stock has popped and dropped but is up over 120% in a year. A leader in the industry, Tesla has several catalysts that will work for it in the coming year. There were concerns about the pricing and low profit margin after the third quarter results but I believe this is temporary. Tesla has the potential to bounce back. 

The company already has enough cash and cash equivalents that it can continue business operations even with a lower gross margin in a quarter. It is increasing production capacity, building factories, and working on the Cybertruck. 

The company enjoys an advantage over several other EV makers. It has a global presence and a charging network that will continue to bring in money in the coming years. Opening up the charging network for other companies was a smart move by Tesla, and while we may not see an immediate impact on the financials, it will result in higher cash flow over the years. 

Tesla has over 50,000 global superchargers which can keep vehicles charged during long commutes. The company is known for innovation and exceptional leadership, which will ensure that Tesla continues to grow as the EV industry expands. Exchanging hands for $248 today, the stock is worth keeping on your radar. 

On the date of publication, Vandita Jadeja 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.

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