Best EV Stocks to Invest in 2024

Electric vehicle (EV) stocks have come under pressure lately as the economy of China, the biggest market for electric cars, is struggling, and the market has hit affordability buffers in the U.S. and Europe. However, with governments phasing out combustion-engine vehicles, phenomenal growth lies ahead. 

The pace of growth in global EV sales, including plug-in hybrids, is due to slow to 21% this year, after halving last year to 32% from 62% in 2022, BloombergNEF, a research firm, estimates. Demand was hurt by higher interest rates that affected affordability, forcing carmakers to trim prices and increase discounts to shift unsold inventory, the Wall Street Journal reported.

In the longer term, though, EV stocks have too much upside to ignore. Global EV sales will reach 30 million by 2025, and nearly 75 million by 2030, the International Energy Agency estimates. Now that many EV stocks have fallen, it makes sense for investors to snap them up. Take a look at our picks of the 10 best EV stocks below.

The 10 Best EV Stocks to Buy in 2024

  1. Aehr Test Systems: The small-cap semiconductor equipment company makes products to test logic, optical and memory integrated circuits, including the silicon carbide chips used in EVs, and for other applications. 
  2. Li Auto: The large-cap Chinese EV maker recently overtook rival Seres and said it expects sales of 100,000 to 103,000 vehicles in the first quarter, nearly double last year’s total.
  3. Toyota: EVs and hybrids already account for a large part of the world’s second-largest car manufacturer’s sales. It said it plans to make as many as 3.5 billion battery electric vehicles (BEVs) by 2030.
  4. EVgo: The Los Angeles-based EV charging company operates an EV fast-charging network across 35 states, and has partnered with car makers, fleet and rideshare operators, gas stations and grocery stores. 
  5. Tesla: The large-cap pure-play EV automaker saw its shares dip when the company finally unveiled its Cybertruck, starting at a pricey $60,900. Unlike many of its rivals, Tesla has been consistently profitable.
  6. BYD Company: The large-cap Chinese EV automaker is Tesla’s biggest competitor internationally and recently surpassed Tesla in production.
  7. Albermarle: The large-cap U.S. speciality chemicals maker is the world’s largest lithium producer and has customers in 100 countries. Lithium is needed for the manufacturing of batteries that power EVs. 
  8. Aptiv PLC: The Dublin-based technology company is a great pick-and-shovel EV stock as it provides software and tech components for advanced driver aid systems and infotainment systems used in EVs. 
  9. ON Semiconductor: The large-cap makes silicon carbide chips that produce faster charging times and longer driving ranges for EVs. They also have other applications, such as 5G and cloud platforms.
  10. Rivian Automotive: A relatively new kid on the EV block, Rivian has only been trading publicly for two years. It makes EV trucks and EV SUVs, so there isn’t much head-to-head competition with Tesla.

    A Closer Look at the Top EV Stocks to Invest in

    Now, let’s take an in-depth look at the best EV stocks and the investment case behind each of them. 

    1. Aehr Test Systems – Plenty of Diversity Beyond EVs

    Aehr isn’t a pure-play EV stock, but its semiconductor testing equipment is crucial to the EV industry, especially regarding charging infrastructure, motor control and power conversion using silicon carbide and gallium nitride semiconductors.

    Aehr chartIn the first six months of fiscal 2024, the company had revenue of $42.1 million, up 65%, year over year, and net income of $10.8 million, up 149% over the same period last year. The company said, though, that it expects a slowing of demand for its products and it cut its prediction for full-year revenue to between $75 million and $85 million from $100 million. This is still an increase of between 15% and 30% over fiscal 2023.

    Aehr provides diversity outside the EV industry, making it a safer bet for long-term investors. Its clients include most of the major chipmakers. Many of Aehr’s products have other industrial uses, including in solar and commuter electric trains. Analysts at William Blair forecast there will be 2.8 million 6-inch equivalent wafers needed per year through 2030, beyond the 4.5 million it predicts will be needed just for EV usage.

    Ticker  One-year price change:  Market Cap P/E
    NASDAQ: AEHR -53.76% $422.06 million 20.63

    2. Li Auto – Best Pure-Play EV Stock for Growth

    Li specializes in range-extended EVs, essentially hybrids that rely more on battery use. The company has now had five consecutive profitable quarters.

    Li auto chartThe EV maker had a record revenue year with $17.44 billion, up 173.5%, and 2023 net income of $1.6 billion, after posting a loss of $282.3 million in 2022.

    Li recently launched new models and in the week that ended March 10, it said it had 9,300 insurance registrations (showing how many vehicles were sold). The only automakers who had more EV registrations in China were BYD and Tesla.

    Ticker  One-year price change:  Market Cap P/E
    NASDAQ: LI 67.80% $37.12 billion 23.99

    3. Toyota – Best EV Stock for Stability

    The Japanese car giant was a late EV adopter, but it’s quickly making up for lost time. The company said it plans to sell 3.5 million EVs across its 30 different models, including Toyota and Lexus, by 2030. It also has plans to install solid-state batteries in its EV cars in 2027 and those batteries are expected to be capable of charging from 10% to 80% in just 10 minutes.

    Toyota chart

    Most of Toyota’s EVs are hybrids and it only has two fully electric models – the Toyota bZ4X and the Lexus RZ450e – but overall EV sales represented 35.9% of company sales in the first nine months of fiscal 2024. In that period, revenue grew 29.3%, year over year, to $252.5 million, while earnings per share (EPS) was $2.17, compared to $1.03 in the same period a year ago.

    The stock is attractively priced, as it trades at a little more than 10 times earnings. The company may also have benefited from the United Auto Workers labor union’s strike last year, as it affected some of its top competitors to a greater degree than it did Toyota.

    Ticker  One-year price change:  Market Cap P/E
    NYSE: TM 69.14% $375.15 billion 10.27

    4. EVgo – Best EV Charging Station Stock

    EVgo’s charging network continues to grow, with 3,550 stalls in operation or under construction, including its flagship eXtend stalls. It added 260 new operational stalls during the fourth quarter.

    EvGo chartIn 2023, it added 366,000 customer accounts and now has more than n 884,000 customers, up from 553,000 at the end of 2022.

    The company had $161 million in 2023 revenue, up 165% from 2022, led by higher revenue from charging and eXtend. Yet, it posted a loss of $135.5 million, 28% wider than in 2022. As more EV vehicles are manufactured and sold, the company benefits regardless of which company builds the cars. At its current price,  it’s probably the best EV stock under $3.

    Ticker  One-year price change:  Market Cap P/E
    NASDAQ: EVGO -57.20% $752.28 million N/A

    5. Tesla – Pricey, but Possibly Worth it

    It’s hard to separate Tesla from its sometimes-controversial CEO, Elon Musk. However, there’s little argument about the company’s growing success as it has increased revenue and net income for five consecutive years.

    Tesla chartTo judge how Tesla is doing, a key metric to watch is deliveries. In 2023, deliveries rose by 38%, year over year, to 1.85 million. Full-year revenue rose 19% to $96.7 billion, and EPS also climbed 19% to $4.30. Despite continued positive earnings, the shares came under pressure when the driving ranges of its recently unveiled and long-awaited Cybertruck fell short of expectations.

    A big concern among analysts and investors is whether Tesla’s shares, valued at roughly 38 times earnings, are overpriced compared to other automakers. GM and Toyota, for example, are both profitable but trade at less than six times earnings, and at less than 11 times earnings, respectively. However, at its current price of $164, it’s trading at a 60% discount from its record high of $409.97 it reached on Nov. 4, 2021. Most analyst see price increases ahead. Tesla’s average 12-month target price, based on forecasts from 51 Wall Street analysts, is $205, a 25% upside. 

    Ticker  One-year price change:  Market Cap P/E
    NASDAQ: TSLA -10.96% $511.13 billion 37.90

    6. BYD Company – Best Pure-Play EV Stock for Long-Term Investors

    BYD began operating in 1995 as a rechargeable battery maker, but now the company makes EVs, rail transit, electronics, and new energy products, with industrial parks in China, the U.S., Canada, Japan, Brazil, Hungary and India. Beside its EV cars, it’s one of the largest EV battery makers in the world, supplying other EV makers, including Tesla.

    BYD graphicThe EV maker’s nine-month revenue of $61.2 billion, was up 58% from the same year-earlier period, and its EPS of $1.02, rose 130%. From October to December, BYD delivered 526,409 EVs, surpassing Tesla for the first time, which delivered 484,507 EVs in the same period.

    Despite sales revenue growth of 277% over the past five years, the stock is trading at just around 19 times earnings. That’s due in part to the geopolitical tensions between the U.S. and China and the current concerns about the Chinese economy.

    Ticker  One-year price change:  Market Cap P/E
    OTC: BYDDF 4.98% $644.22 billion 19.20

    7. Albermarle – Best EV Stock Trading at a Discount

    Albermarle continues to have strong sales, but its margins have fallen, mainly due to lower prices for lithium. To me, the stock, trading at less than 10 times earnings, is a bargain because the company’s financials are healthy and when lithium prices rebound, as analysts expect, the company’s margins will grow again.

    Albermarle chart

    Due mainly to the spread of EVs, the global demand for lithium is expected to grow 2.5 times between now and 2030, that is a compound annual growth rate of 15% to 20%, the company said. 

    In 2023, the company had record revenue of $9.6 billion, up 31%, but EPS disappointed, falling to $13.36 from $22.84 in 2022. Albemarle also offers a quarterly dividend, which it raised in 2022 by 2% to $0.40 per share. Over the past 20 years, the company has increased its dividend by 471%.

    Ticker  One-year price change:  Market Cap P/E
    NYSE: ALB -46.02% $14.30 billion 9.10

    8. Aptiv PLC – Best Under-The-Radar EV Stock

    Aptiv isn’t well-known to investors because its products are sold to EV car manufacturers, not directly to the public. The company is predicting 7% revenue growth this year, despite the likelihood of flat global EV production.

    Aptiv chartThe specialized parts supplier company had $20.1 billion in 2023 revenue, up 15%, while EPS soared to $10.39 from $1.96 in 2022. For 2024, it expects revenue of between $21.3 billion and $21.9 billion.

    The company appears to be a smart way to invest in EV stocks without having to select an EV maker, as most of them use Aptiv’s products. The stock is overlooked, as is evidenced by its P/E ratio of less than 8.

    Ticker  One-year price change:  Market Cap P/E
    NYSE: APTV -32.22% $20.88 billion 7.45

    9. ON Semiconductor – Best Pick and Shovel EV Stock

    ON’s silicon carbide chips are crucial to EVs, but they have plenty of other uses in converters, inverters, power supplies, battery chargers and motor control systems because, compared to basic silicon chips, they provide higher temperature, voltage and frequency thresholds. ONsemi chartAccording to a report by Mordor Intelligence, the silicon carbide power semiconductor market, estimated at $1.74 billion in 2023, is expected to grow to $5.37 billion by 2028, which translates to a compound annual growth rate (CAGR) of 25.24% over that time. 

    The company reported full-year revenue of $8.25 billion, down 0.8%. But, in terms of profitability, its EPS rose to $4.89 from $4.25 in 2022. ON’s best performing business is the sales for automobiles, mainly EVs, with full-year revenue up 29% to $4.3 billion from the segment.

    Ticker  One-year price change:  Market Cap P/E
    NASDAQ: ON -4.74% $32.99 billion 15.79

    10. Rivian Automotive – Plenty of Upside With Risk

    The EV maker made 57,232 vehicles in 2023 and delivered 50,122, more than doubling production and deliveries compared to 2022. Revenue for 2023 was $4.4 billion, up 167%, while Rivian pared losses a bit to $5.43 billion, compared to a net loss of $6.75 billion in 2022.

    Rivian chartRivian CFO Claire Rauh McDonough has said that she expects the company to start turning a profit toward the second half of 2024.

    Rivian is expanding its EV offerings, making them more affordable to the public. It just added the mid-sized R2, R3 and R3X models, with R2 costing $45,000 and the other two expected to be less.

    The big concern for Rivian is whether it will continue to move closer to profitability as it attempts to ramp up production. 

    Ticker  One-year price change:  Market Cap P/E
    NASDAQ: RIVN -18.93% $10.46 billion N/A

    What Are EV Stocks?

    There are a lot of ways to play the EV revolution as EV stocks encompass a wide range of companies with a connection to the sector. The main types of EV stocks:

    • Pure-play EV manufacturers such as Tesla, Rivian, Li Auto or BYD
    • Standard car manufacturers that are offering more EV models, such as Toyota
    • Companies that mine the lithium that is so critical to EV batteries
    • Charging companies that own and operate EV charging stations, such as EvGo
    • Semiconductor makers or semiconductor testing companies that are critical to operating EV vehicles
    • Companies that make software that is used by EV companies

    Why Invest in EV Stocks?

    EV Stocks Have Long-term Growth Potential

    Zero net emission targets are leading governments to offer incentives to companies in the EV space. Governments are increasingly requiring stricter emission controls from car manufacturers, leading them to offer more EV models. Changing attitudes are helping the shift, as many consumers now favor cars that are not only cheaper to run but will also have a smaller environmental footprint.

    Innovation Continues at Pace to Keep EVs as a Disruptive Technology

    EVs have the potential to have more torque, and eventually, lower operating costs than gas-operated automobiles. That growth in innovation will fuel sales as manufacturers of EVs, batteries and other EV-related equipment try to keep up. As manufacturers increase the range of EVs and faster charging options come available, more car buyers will switch to EVs.

    The Possibility of High Returns

    Whenever a new industry forms, fortunes are made (and lost). Investors who can find the right EV stocks can look forward to consistent double-digit growth over the next decade and beyond. The fast-growing EV market will mean substantial gains for some EV companies, creating opportunities for investors in those companies.

    Where to Get EV Stock Tips and Insights

    To learn more about how to choose EV stocks to invest in, we recommend checking out AltIndex, a subscription service that uses artificial intelligence (AI) and alternative data

    AltIndex graphic

    This means that it analyzes social media and other websites, app downloads, customer satisfaction ratings, and other data regarding a company.

    The data AltIndex gathers over time is then compared to other companies while using machine learning to come up with investment insights. Stocks are given a score from of 1 to 100, simplifying the analytical process for investors.

    With more than 10k members, AltIndex is a widely used and trusted service. It provides over 100,000 unique daily stock insights and alerts, and has a very impressive win rate of 75% from its AI stock picks.

    You can try AltIndex’s Starter Plan for just $29 a month and receive stock picks directly to your email, as well many other useful features.

     

      

    Conclusion

    There are plenty of stocks that allow investors to benefit from the ongoing EV revolution, including pure-play EV manufacturers, lithium mining stocks, chipmakers or pick-and-shovel stocks that are involved in supplying crucial products and services to the EV industry. 

    The push by governments to help the adoption of EVs has driven interest in investing in related stocks. But the industry is still relatively young, so it’s not easy to so who the winners and losers will be in the long term. Depending on your risk tolerance, it may make sense combine established EV players, such as Tesla, BYD, or Aehr, with riskier stocks with better growth potential, such as Li Auto, Abermarle or Rivian.

    It’s easy to fall into the fear of missing out (FOMO) trap when it comes to EV investing, though. Like with any other sector, do your due diligence and pick stocks with solid finances and good potential for revenue and profit growth.

    References

    https://www.caranddriver.com/news/a45942785/toyota-future-ev-battery-plans/

    https://www.reuters.com/business/autos-transportation/tesla-falls-long-wait-cybertruck-payoff-hefty-price-tag-2023-12-01/

    The UAW won big against Detroit automakers. Unionizing Tesla and Toyota will be tougher | CNN Business

    2024-03-06-EVgo-Q4-and-FY2023-Earnings-Release.pdf (q4cdn.com)

    Silicon Carbide Power Semiconductor Market – Size, Share & Industry Analysis (mordorintelligence.com)

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    Jim Halley
    Editor

    I am an experienced journalist who has also worked as an editor and writer at the Savannah Morning News, Salt Lake Tribune, USA Today, Stars and Stripes, and The Motley Fool. I spent the first half of my career in sports journalism, but in recent years have switched to writing about my other passion, stocks, particularly healthcare, real estate and consumer staples stocks. I've won numerous journalism awards from the Associated Press and state press associations and have been a judge for the Georgia Sportswriters Association. I've written one non-fiction book, Just One More Time, about Georgia Southern football, and…