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12 electric car stocks to watch in 2022

While the electric car market share is increasing, petrol and diesel cars are becoming a thing of the past. The trend of traditional cars has slowly become replaced by newer, greener, and renewable alternatives, and this is just the start of a growing market that could pave the way for a more sustainable future. Join us while we review some of the best-performing and promising electric car stocks to watch this year, based on returns and profitability.

Please note that past performance is not a reliable indicator of future results.

Reviewed by
Chief Market Analyst
mhewson_CMC

The future of the automotive industry

As awareness of climate change increases and human behaviours transition, consumers may begin to shift their loyalty from internal combustion engines to electric and battery-based technologies. This shift in manufacture and purchasing could help reduce total emissions, therefore cleaning the air and resulting in greener societies. But are we ready for an electric car revolution?

As of 2022, there are approximately 12 million electric cars on the road globally, according to Statista, and this figure is expected to increase to over 50 million by 2025. A mix of both EV specialists and traditional legacy manufacturers are helping the adoption of electric vehicles to become more widespread.

This could take years, and many of these companies are still on the road to profitability, so many investors are deciding to take action now and get involved with some of the most sustainable shares​ in the industry. A trade placed in the right company could result in revolutionary growth for the future and a profit for the investor.

What are the different types of vehicles?

  • Battery electric vehicles (BEVs): these are purely powered by rechargeable lithium-ion batteries

  • Plug-in hybrid electric vehicles (PHEVs): these contain both an electric battery, which is recharged from a plug, and a combustion engine

  • Hybrid electric vehicles (HEVs): these have an electric battery which is charged using the combustion engine

What is the electric car market share?

After a decade of rapid growth, data from the International Energy Agency (IEA) reports that sales more than doubled in 2021 to 6.6 million from the previous year. This means that the EV market accounts for almost 9% of the global automotive market.

In the UK, the electric car market share is expected to increase particularly within the next few years as the government prepares to ban the production of petrol and diesel vehicles from 2030. Electric options accounted for 11.6% of all new car registrations in 2021, according to SMMT. The plug-in car grant (PICG) is a government-funded scheme that allows buyers to automatically quality for a £1,500 discount on an EV model if it sells for under £32,000 in the UK, in an effort to sway society towards cleaner options.

Hybrid cars will still be available for sale until 2035, but the focus is remaining on lithium-ion batteries and hydrogen-powered vehicles.

How to trade on electric car stocks

  1. Choose your product. Decide whether you want to spread bet, which is tax-free in the UK*, or trade contracts for difference (CFDs).
  2. Pick your instrument. This could be a specific share, ETF, or share basket​​, which are all explored in more detail below.
  3. Place your bet. If you think the asset will rise in value, you could go long (buy), whereas if you think it will fall, you could go short (sell).
  4. Keep up to date. The EV market is constantly developing and seeing new competitors, so it’s a good idea to follow news stories and social media for better awareness.
  5. Manage your risk. Derivatives can be volatile, so traders often choose to use risk-management tools such as stop-loss and take-profit orders​​ when placing a trade.
Spread bet on over 11,500 instruments

12 EV stocks to watch

Here’s a list of some of the best electric car companies to watch in terms of returns, market capitalisations, and P/E ratios, as well as those with potential for growth and future projects in the pipeline. Return on equity (ROE) is a measure of the business’ profitability in relation to equity, which is calculated by dividing net income by shareholders’ equity. It’s based on the most recent financial year.

This information is taken from MarketBeat and is up to date as of February 2022.

InstrumentPriceMin spreadMargin rate
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Tesla is based in California, specialising in the design and manufacturing of electric cars, energy generation, and energy storage. Since its inception in 2003, Tesla has pioneered the market and is currently the biggest EV seller in the world, according to Statista. The company has sold over one million Model 3 sedans since it was introduced in 2017. Tesla became the sixth US company to reach a $1tn valuation in October 2021, although this figure has floated up and down since then. The company is also developing its Cybertruck pick-up truck, which is expected to have better utility than a traditional truck and better performance than a sports car.

Return on equity: 20.36%
Market cap: $925.9bn
P/E ratio: 188.16

Rivian is a US manufacturer and technology company with headquarters in California. It produces sports utility vehicles (SUVs), pick-up trucks, vans, and automotive accessories in its Illinois-based manufacturing plant. It has additional facilities across the US, Canada, and the UK. Rivian has released two models as of 2022, the R1T and R1S, although it has yet to make a profit or revenue. The company also offers services such as insurance, financing, charging solutions, and fleet management. It debuted on the Nasdaq exchange in November 2021, making it one of the most newly traded companies on this list.

Return on equity: N/A
Market cap: $54.9bn
P/E ratio: N/A

Nio is a Chinese company headquartered in Shanghai. It’s involved in the design, development and retailing of smart and high-performance electric vehicles. The company also focuses on modern trends within the automotive market, such as artificial intelligence (AI) and autonomous driving. It has numerous offices in mainland China, as well as operating on a global level, with additional offices in the US, UK, and Germany. Nio was previously classified as a penny stock until its valuation jumped in 2020.

Return on equity: N/A
Market cap: $38.7bn
P/E ratio: N/A

Lucid Group (also referred to as Lucid Motors) is based in California. The company originally focused on building EV batteries and powertrains for other manufacturers before deciding to develop luxury electric vehicles. Its factory is located on a 500-acre property in Arizona and aims to produce 300,000 cars within the next few years. Lucid’s first and flagship model is the Lucid Air, which is reported to be the longest range and fastest charging luxury EV in the world. It merged with SPAC CCIV in July 2021 to debut on the Nasdaq exchange, giving it limited financial information.

Return on equity: N/A
Market cap: $45.2bn
P/E ratio: N/A

XPeng is a Chinese company headquartered in Guangzhou, with offices in California and listings on the Hong Stock and New York stock exchanges. It designs, develops, manufactures and retails smart electric vehicles across the Republic of China. Its models include the compact G3 SUV and four-door P7 SUV. XPeng also provides maintenance, charging, vehicle leasing, and ride-hailing services, and is a developer of autonomous vehicles. Although it has reported impressive revenue growth over the last year, it shows little earnings, making it a possibly risky investment.

Return on equity: -12.10%
Market cap: $29.9bn
P/E ratio: N/A

General Motors is an established manufacturer with headquarters in Detroit, US. It predominantly produces cars with combustible engines but has invested heavily in cleaner energy over recent years Operating under its Chevrolet, Cadillac, GMC, Buick, and Opel brands, GM has a large automotive market share and wishes to translate this into the emerging EV segment. One of its models is the Chevrolet Bolt, which is the first electric car capable of running over 200 miles on its battery. The company’s joint venture with SAIC Motor and Wuling Motors (SAIC-GM-Wuling) has produced one of the most sold mini EVs in the world.

Return on equity: 17.66%
Market cap: $71.9bn
P/E ratio: 7.37

BYD is a Chinese company operating two major subsidiaries: BYD Automobile and BYD Electronic. It has headquarters in Shenzhen and is a manufacturer of electric and hybrid vehicles, including cars, buses, bicycles, and trucks, as well as battery-powered solar panels and batteries for mobile phone devices and energy storage. The company plays a significant role in the Chinese market, with Warren Buffet’s Berkshire Hathaway holding an 8% stake in BYD.

Return on equity: 7.24%
Market cap: $84.25bn
P/E ratio: 129.95

Nikola is a US manufacturer that focuses on zero-emission battery-electric and hydrogen fuel-cell vehicles, with headquarters in Phoenix, Arizona. The company develops EV drivetrains, components, energy storage systems, and hydrogen station infrastructure solutions. Its models include heavy-duty vehicles, such as the Nikola Tre daycab semi-truck and Nikola Two sleeper truck. Nikola may attract investors due to interest in hydrogen fuel, although the stock is often volatile in the market and has high short interest.

Return on equity: -78.57%
Market cap: $3.1bn
P/E ratio: N/A

Kandia Technologies is a Chinese EV and battery manufacturer. The company is in its early stages of growth and has the smallest market capitalisation on this list. Its products include EV parts, products, and off-road vehicles including ATVs, utility vehicles (UTVs), and go-karts. Despite experiencing some sharp jumps in share price, Kandi is classified as a penny stock, trading below $5. This means that it could still be a highly speculative investment with large opportunities for growth and loss.

Return on equity: -5.41%
Market cap: $233.7m
P/E ratio: 18.88

Aptiv doesn’t manufacture EVs or batteries but instead focuses on electric vehicle architecture. The company uses its expertise to make electric vehicles safer, greener, and also more connected, operating in the autonomous driving sphere. It was founded in Michigan, US and has since moved its headquarters to Dublin, Ireland. It owns several subsidiaries and has worked on joint ventures with automotive leaders such as Hyundai.

Return on equity: 8.73%
Market cap: $36.3bn
P/E ratio: 68.84

Canoo is a US company with headquarters in California. It designs and manufactures commercial EVs, such as minivans, pick-up trucks and multi-purpose delivery vehicles for ride sharing and rental services. In the past, the company has worked on projects with automotive giant Hyundai, as well as tech giant Apple.

Return on equity: -41.61%
Market cap: $1.5bn
P/E ratio: N/A

Li Auto is a Chinese company with headquarters in Beijing and manufacturing facilities in Changzhou. It’s a producer of new energy passenger vehicles (NEVs) including SUVs through the Li One brand. In particular, its Li Xiang One model has the second-longest electric range of any plug-in hybrid vehicle in the world at 180km. It also provides products and services such as charging stalls, Internet connection services, and extended lifetime warranties. The company is dual listed on the Nasdaq and Hong Kong stock exchanges.

Return on equity: -1.57%
Market cap: $29.75bn
P/E ratio: N/A


Please note that past performance is not a reliable indicator of future results.

Are there any electric vehicle ETFs?

There are several exchange-traded funds that provide exposure to the themes explored in this article. With our spread bet and CFD products, you can take a single position on multiple companies based on whether you think the trends will grow or collapse. Here are some interesting ETFs within the sector.

Similar to exchange-traded funds, traders can take a position on a variety of electric car shares through our associated share baskets, which allow you to diversify your portfolio with a basket of stocks. We offer two that are particularly relevant to the sector:

  • Driverless Cars basket​: comprised of 27 technology companies with a specific focus on autonomous vehicles and artificial intelligence. Holdings include Uber, Qualcomm, Tesla, Livent Corporation, Intel, Ford, and Analog Devices.

  • Renewable Energy basket​: comprised of 17 US companies within the renewable energy sector, including leading manufacturers of power plants, solar panels, and battery cell systems (which are essential for EV production). Holdings include Enphase Energy, IDACORP, NextEra Energy Partners, Sunrun, Plug Power, and First Solar.

Our bespoke share baskets also come with lower holding costs and zero commissions (other fees may apply) than when you open a position on an individual share or ETF. Get started now by opening an account.

FAQs

Will EV stocks go up?

Globally, the electric vehicle market is expected to rise at a compound annual growth rate (CAGR) of over 14% between 2019 and 2030, according to Statista. Therefore, as demand grows for EVs, we would expect the value of EV manufactures to rise also, given restrictions that will be imposed against petrol and diesel-based vehicles in many countries around the world. However, some investors may say that EV stocks are in a speculative bubble, so it’s important that you do enough research before opening a position.

What are some EV battery stocks to watch?

Electric vehicle manufacturers such as Tesla, Nio, and General Motors seek out lithium producers to provide batteries for their models. Some popular lithium battery stocks to watch include Albemarle, Panasonic, Galaxy Resources, Lithium Americas, and QuantumScape.

How do I invest in EV technology?

Seeing as EV technology is so broad, you could either take positions on companies involved in auto manufacturing directly, or companies that provide related products and services such as lithium mining, robotics, and autonomous technology.

Do EV stocks pay dividends?

It’s a well-known fact that most technology companies don’t offer dividends to shareholders, and the same goes for the majority of electric car companies. If you’re looking to earn potential income on your investment, see our list of the best-yielding dividend shares in the UK.


*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

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