These are the 5 best EV stocks to buy and watch now


EV shares have multiplied Tesla‘s (TSLA) wake up and electric cars seem to be becoming mainstream – but not all are created equal. Some auto stocks are more ready than others for an EV future. Here are the top-rated electric vehicle and EV game manufacturers.


  • Tesla
  • BYD
  • Li Auto
  • Global X Lithium and Battery Tech ETF

Best EV Stocks to Buy or Watch

The charts of most EV stocks are under new pressure after severe damage over the past year. In general, both established automakers and startups are speculative bets on electric vehicles, which are themselves seen as a nascent field. They have suffered from a risk-out sentiment in the current market and as key component shortages drag on.

The electric car stocks below have the best mix of basics and technical features.

Tesla stock

Tesla stocks, the top auto and EV stocks by market cap, have an IBD Composite Rating of 91 and an EPS Rating of 76. Shares briefly bounced back above the 40-week moving average earlier in August, but are now there down again. They remain well above the 10-week average. The relative strength line for TSLA stocks is improving after a slump. It shows a large, long-lasting uptrend.

Tesla expects to grow car shipments by 50% per year. In 2021, Tesla deliveries rose 87% to 936,172.

Tesla beat second-quarter earnings in July. Deliveries of electric vehicles increased by 27% year-on-year in the second quarter. But deliveries fell nearly 18% from the first quarter amid a Covid-related factory shutdown in April.

The Model S Plaid is Telsa’s fastest car to date, going from 0 to 60 miles per hour in under two seconds. Tesla makes four vehicles, primarily the Model 3 sedan and the Model Y crossover SUV. It also plans the Cybertruck, Semi and Roadster.

BYDDF stock

BYD (BYDDF) has no Composite Rating and an EPS rating of 57. BYDDF shares broke past a buy point of 39.81 in late June. Shares fell back below the buy point in July as Chinese stocks sold out. It is now below the 10-week average.

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China’s BYD is listed in Hong Kong and trades over the counter in the US

Chinese car and battery giant BYD has completely switched to battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). BYD more than tripled electric vehicle sales in July, after more than tripling sales in June and the second quarter amid Covid-19 lockdowns. It also tripled EV sales in 2021. Backed by Warren Buffett’s Berkshire Hathaway (BRKB), BYD is selling EVs in Norway and expanding into other global markets.

BYD, a major battery manufacturer, may soon provide Tesla with EV batteries. BYD also makes its own chips, enabling rapid expansion in 2021 and so far this year.

LI Stock

Li Auto stocks have a Comp Rating of 92 and an EPS Rating of 77. Li, an IBD 50 top growth stock, peaked for seven weeks, from mid-May to late June, but then sold off with Chinese stocks in general.

The Chinese EV maker is selling the Li One SUV. The Li One is a hybrid EV, with a small petrol engine to extend its range. The L9 SUV, Li Auto’s second model, was launched on June 21.

Li Auto’s EV sales are up 63% in the second quarter, despite Covid headwinds. July sales were up 43% from a year earlier, but were down 25% from June. In 2021, Li nearly tripled electric vehicle sales. Turnover is growing at a brisk pace.

SQM Stock: Lithium for EV Batteries

SQM stocks have a perfect Composite score of 99 and an EPS rating of 84. SQM sits just above the 10-week average as it consolidates near multi-year highs.

Sociedad Quimica y Minera peaked in May, after soaring that month on strong gains, supported by rising lithium prices.

Chile’s SQM leverages the global adoption of electric vehicles, which use lithium batteries. In the first quarter, lithium prices skyrocketed as demand for the critical EV battery material outpaced supplies. SQM also produces iodine and potassium, which are used in X-rays and fertilizers respectively.

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Lithium ETF includes SQM, Tesla, BYD

The Global X Lithium and Battery Technology ETF (LIT) is recovering after coming under pressure earlier this year. The LIT fund rose sharply for most of 2020 and 2021.

The Lithium ETF has a relative strength of 70 out of a possible 99. That means it has surpassed 70% of all stocks in the IBD database in the past year.

The largest holdings in the lithium stock ETF include: Albemarle (ALB), as well as SQM, BYD and Tesla. The LIT fund also invests in lithium miners and refiners, as well as battery manufacturers. Most electric vehicles today use lithium ion and lithium iron phosphate (LFP) batteries.

Investing in an ETF, or exchange-traded fund, can reduce the risk of individual stocks.

Tesla vs BYD: Which EV Giant is the Best Buy?

In the short term, EV stocks will struggle with chip restrictions, but those will begin to ease. Battery costs and shortages could become an issue in the medium term as supplies of lithium and other commodities struggle to keep up with demand. In the longer term, there is likely to be more government support for electric vehicles, while increased production of electric vehicles should help lower vehicle prices.

Are electric vehicle shares a good buy?

Companies with two key characteristics are generally the best candidates to buy and view stocks, according to CAN SLIM guidelines. First, they need a strong track record of earnings growth. Second, the stock should exhibit elements of market outperformance and form bullish chart patterns.

But most new EV stocks have neither. They contain Fisker (FSR), canoe (GOEV), Future of Faraday (FFIE), Lordstown (RIDE) and xos (XOS). Many of these EV startups are not yet producing or supplying electric vehicles.

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Get Alerts for Stocks Near Points of Sale with IBD Leaderboard

However, two startups have started selling their first electric vehicles, generating revenue. They contain Lucid Motors (LCID) and Rivian Automotive (RIVN).

Meanwhile, Chinese EV stocks like Nioz (NIO), xpeng (XPEV) and Li Auto (LI) sell tens of thousands of vehicles, but remain unprofitable for the time being. Then there are old car giants like General engines (GM), Ford (F) and China BYD Co. (BYDDF) that turn into electric vehicle powerhouses.

Electric car stocks, battery stocks, charging stocks

The growing universe of EV stocks doesn’t stop at automakers. A constellation of other companies provides car batteries, car charging stations, electric motors and other EV-related products. Among them are EV charging networks ChargePoint (CHPT), EVgo (EVGO), Blink Charging (BLNK) and wall box (WBX).

Hyliion (HYLN) is developing electric powertrains for large trucks and powertrains that can be compatible with renewable natural gas and hydrogen fuel cells.

Romeo Power (RMO) makes battery packs for commercial EV fleets. QuantumScape (QS) touts a major breakthrough in solid-state lithium metal batteries. And Global X Lithium and Battery Technology ETF (LIT) has a basket of stocks, from lithium miners to battery makers, poised to capitalize on the rise of electric vehicles.

magna (MGA) supplies battery housings and e-drive gearboxes to GM, Nio and Xpeng, among others. The company will also make the Fisker Ocean SUV, which is likely to arrive by the end of the year.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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