As the world continues to shift towards renewable energy sources, electric vehicles (EVs) are rapidly gaining popularity among consumers and investors alike. With an increasing demand for clean energy and sustainable transportation solutions, the EV industry is expected to see significant growth in the coming years. As a result, many investors are looking for opportunities to invest in top-performing EV stocks with the potential for long-term growth.
Of course, not all EV stocks are created equal. Some have extended range to see a longer-term growth trajectory play out, while some may be flashes in the pan. Accordingly, determining which of the two groups a given EV company belongs to is what investors ought to be focused on.
The following three EV stocks have plenty of potential to move higher in 2023 and beyond. These are companies with durable competitive advantages, mainly ascribed to their geographical focus. Let’s dive in.
| NIO | Nio | $9.79 |
| LI | Li Auto | $24.17 |
| CHPT | ChargePoint | $11.42 |
Nio (NIO)
The first Chinese electric vehicle company on this list is Nio (NYSE:NIO). Nio is a pure-play EV stock with a strong domestic presence in China. Indeed, that’s why I’ve touted NIO stock for some time. As one of the leading companies in the Chinese EV market, Nio is among the most attractive options for investors bullish on this segment over the long term.
The company differs from its competition in a few ways. First, Nio’s high-quality technology and impressive vehicle designs are worth considering on their own. However, Nio also provides unique battery-swapping stations, which make it a top contender in the market. Thus, for those seeking an innovative and promising investment opportunity in the Chinese EV industry, Nio is worth considering.
But that’s not all. From a numbers perspective, Nio remains an incredible opportunity. The company saw an impressive 109% increase in unit sales in 2021, selling 91,429 electric vehicles. Accordingly, analysts predict a reduction in losses by 2023 as sales continue to climb. NIO stock has declined approximately 75% in value over the past year. However, the company remains a significant player in the fast-growing Chinese EV industry.
Although Nio still has actual work to do to achieve profitability, the company is still in its early stages of growth. Investors who have a long-term perspective and gradually purchase the stock over time may be rewarded for their patience as the company continues to expand.
Li Auto (LI)
Li Auto (NASDAQ:LI) is another company investors should consider if they’re bullish on the Chinese EV market. Like Nio, Li Auto offers a range of luxurious, high-end SUVs that may appeal to potential buyers.
While Li is not one of the most prominent players in the Chinese electric vehicle industry, the potential for significant growth in its stock price is considerable. LI stock may be a favorable choice for investors with a long-term perspective seeking a more aggressive investment opportunity.
According to analysts, Li is expected to experience substantial revenue growth of approximately 84% in 2023. This would propel the company beyond the critical threshold of $5 billion in annual sales. Accordingly, considering Li’s impressive 177% increase in vehicle deliveries to 90,491 in 2021, some analysts predict that the company’s earnings per share will turn positive this year.
While other Chinese EV competitors have seen their stock prices wane, LI stock has shown relative resilience. I expect to see continued outperformance from Li Auto as more Chinese consumers seek personalized options in the EV sector.
ChargePoint (CHPT)
Last on this list of EV stocks to buy, but certainly not least, we have EV charging company ChargePoint (NYSE:CHPT). ChargePoint is a leader in electric vehicle charging solutions for residential and commercial use in the United States and Europe. Based on the actual recommendations (buy, hold, sell, etc.) made by 14 brokerage firms, the company currently has an average brokerage recommendation of 1.64, which falls somewhere between a strong buy and a buy rating on a scale of 1 to 5 (strong buy to strong sell).
Based on the average of analysts’ estimates, ChargePoint is expected to experience a revenue increase of around 100% this year, which bodes well for the company’s overall performance. Additionally, it’s worth noting that ChargePoint’s financial stability is currently solid and stable, adding to the appeal of the company’s fundamentals.
The global EV market is expected to experience a rapid compound annual growth rate of 18.2% through 2030, resulting in a significant total available market. This growth trajectory will likely give ChargePoint ample opportunities to increase its sales over time.
While ChargePoint may take some time to achieve profitability, the company remains a top pick for long-term investors interested in EV stocks.
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.