Best EV Stocks to Consider in 2022: Tesla vs Nio vs Lucid vs BYD
Singapore is set to have 60,000 Electric Vehicles (EVs) charging points by the end of 2030…
And the Land Transport Authority (LTA) has already deployed 60 electric buses.
By 2040, Singapore aims to completely phase out Internal Combustion Engine (ICE) vehicles.
Looking abroad, the International Energy Agency reported that sales of electric cars hit 6.6 million in 2021.
That’s TRIPLE the market share from two years prior.
Clearly, the adoption of EVs is rapidly increasing and the future looks very electric.
So, if you’re looking to invest in EV companies, here are some of the best EV stocks to consider buying now.
TL;DR: Best EV Stocks to Consider in 2022
|EV Manufacturer||Market Captilisation (USD)||P/S Ratio (TTM)||Vehicle Deliveries in 2021||EPS (TTM)|
|Tesla (TSLA)||1.048 Trillion||16.68||936,172||4.90|
|Lucid (LCID)||43.398 Billion||625.94||125||-6.41|
|NIO (NIO)||40.063 Billion||6.47||91,429||-1.01|
|BYD (BYDDY)||102.207 Billion||2.71||593,745||0.36|
Information taken from Yahoo Finance on 25th March 2022
Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing in any investment product. The writer may have a vested interest in the investments products mentioned.
The EV Market
Before we dive into the top EV stocks to consider investing in, let me start by saying that these are high-risk investments and not suitable for those who cannot stomach volatility.
That said, the EV market has a very exciting future with a plethora of companies vying for a slice of the pie.
Aside from car manufacturers, the EV market also encompasses charging network companies such as ChargePoint (CHPT), EVgo (EVGO) and Blink Charging (BLNK), plus other EV-associated companies that deal with batteries, electric motors and other EV-related products.
In this article, we will focus solely on the best EV manufacturers to consider and evaluate their current standing within the EV market, unique selling points, and their potential.
Due to the EV market being relatively new, many EV companies are still unprofitable and some have just started deliveries. As a result, traditional stock analysis metrics such as price-to-earnings ratios can’t be used to evaluate these companies.
Tesla (TSLA) – The Current King of the EV market
With the largest market capitalisation by far in the EV market at a whopping one trillion USD, Tesla is way ahead of the curve right now with 936,172 deliveries in 2021.
To put things into perspective, this is a chart of the market share that Tesla holds:
In 2021, Tesla held a 14% market share and has constantly grown its vehicle deliveries by an average of 50% annually.
Tesla predicts that this exponential growth in deliveries will continue for the foreseeable future at an average rate of 50% annually.
Aside from excellent delivery numbers and market share, Tesla is one of the few EV companies to have passed the profitability hump with an EPS of 4.90.
Unique Selling Points
You might already have seen a few Tesla Model 3s on the roads of Singapore with more models set to be released in the future.
Instead of producing mass-market affordable cars, Tesla cars are compelling electric vehicles with some of the most advanced features such as Tesla’s Autopilot.
Autopilot advanced safety and convenience features are designed to assist you with the most burdensome parts of driving. Autopilot introduces new features and improves existing functionality to make your Tesla safer and more capable over time.
Autopilot enables your car to steer, accelerate and brake automatically within its lane.
Besides manufacturing cars, Tesla also produces battery energy storage from home to grid-scale, invests in clean energy technology (solar panels) and its own supercharging network.
As evident from the charts above, Tesla has a great track record and has been delivering on most of its promises thus far.
In 2022, Tesla expects a comfortable growth in deliveries by 50%, especially with its new factory in Berlin, despite the ongoing supply chain disruptions.
Moreover, Tesla is currently working on its Full Self-Driving (FSD) software, which in theory, will be able to conduct short and long-distance trips with no action required by the person in the driver’s seat.
Should Tesla’s FSD become successful, it would be a revolutionary step forward in the automotive industry.
For those interested to find out more, you can read Tesla’s press releases and decks here.
Lucid (LCID) – The Luxury EV Maker
Entering the fray with its luxury electric sedans in 2021, Lucid is seen as a strong contender in the EV market.
While deliveries have only begun last year, Lucid already has a market capitalisation of more than 40 billion USD.
However, Lucid is not yet profitable with an EPS of -6.41.
Unique Selling Points
So…why are some investors buying up Lucid stock?
The answer lies in its superior technology.
With an impressive range of 837 kilometres, the Lucid Air Dream Edition takes the crown for the longest range of any mass-produced EV, beating Tesla’s Model S with a range of 637km.
It also has a better battery efficiency than the Tesla Model S.
When it comes to features, the car is equipped with a plethora of affordances including Amazon’s Alexa and Dolby Atmos for a seamless luxury driving experience.
Lucid plans to launch three new versions of the Lucid Air with a delivery target of 12,000 to 14,000 vehicles in 2022.
Boasting more than 17,000 reservations for Lucid Air, coupled with the launch of its first international studio in Canada, investors are confident in Lucid’s long-term growth that could compete with Tesla in the future.
For those interested to find out more, you can read Lucid’s press releases and decks here.
NIO (NIO) – Affordable EVs with Swappable Batteries
With 91,429 deliveries in 2021 representing a 109.1% increase from the previous year, NIO has been ramping up its EV sales in the Chinese market.
However, like Lucid, NIO has yet to turn a profit with an EPS of -1.01 and is still far off from Tesla in terms of market share.
In February 2022, NIO’s deliveries increased only 9.9% year over year compared to a 33.6% year-over-year growth in January 2022.
Moreover, as a Chinese company, politics has affected its stock price greatly when the Chinese government intervenes, making it a riskier stock compared to US-based ones like Tesla and Lucid.
Unique Selling Points
Remember those Tamiya cars that some of us used to play? We could easily swap out their batteries for another go at the circuit.
But on a real vehicle, things are not that simple.
That is where NIO comes in with its battery swapping technology.
With this, NIO cars can swap out an entire battery in just 10 minutes, and the service itself isn’t too expensive either.
To date, NIO has more than 800 battery swap stations in China with even more in the works.
On top of this, NIO has something that the others don’t: it can make its cars’ upfront costs cheaper by having customers rent batteries instead of buying a car with one.
Although deliveries have slumped this month, Nio aims to expand to at least three European countries this year and to 25 countries by 2025.
Its revenue has grown by 88% a year over the past two years compared to Tesla’s with about 28% over the last three years.
However, like Lucid, NIO has yet to prove itself and rising tensions on the global scale make NIO more volatile to price changes.
For those interested to find out more, you can read Nio’s press releases and decks here.
BYD (BYDDY) – The EV Giant of China
While Tesla may be the king of the global EV market, BYD reigns supreme in China with the largest market share and 593,745 deliveries in 2021.
That represents a 232% year-on-year increase in deliveries, far surpassing that of both Tesla and NIO.
In February, BYD grew EV sales by 764% year over year, after more than tripling EV sales in 2021.
Unlike NIO, BYD is a profitable Chinese EV manufacturer with an EPS of 0.36.
Unique Selling Points
BYD stands out from the crowd with its lithium iron phosphate (LFP) batteries which rely on iron phosphate instead of nickel.
Its ‘game-changing’ Blade battery has been said to possess ‘ultra-safe’ credentials which give it an edge over its competitors.
In addition to cars, BYD also manufactures electric buses, battery-powered forklifts and trains and has a strong presence in the electronics-manufacturing business, including smartphones, PCs and solar panels.
Undoubtedly, BYD is a major player in China, which may explain why BYD is one of the few non-U.S. companies backed by Warren Buffet, the CEO of Berkshire Hathaway.
BYD has started selling its EVs in Norway and is expected to increase exports in 2022, with both Europe and Australia being key markets.
With their EVs being cheaper than Tesla, a diversified business model, and strong growth, BYD is set for another strong year ahead.
For those interested to find out more, you can read BYD’s press releases and decks here.
Like always, remember to do your own due diligence before choosing to invest in any of these companies. This article serves as a brief overview of some of the best EV players and how they are faring now.
For those still relatively new to investing, consider investing in an EV ETF instead to reduce your risk.
Whichever method you pick (individual stocks or ETFs), you’ll be investing in the growing EV market as the world shifts towards clean energy.