The booming electric vehicle (EV) sector was one of the best-performing stock groups of the past year, before an aggressive reset in valuations hit the industry in recent weeks.
This is most evident in EV darling Tesla (NASDAQ :), whose stock has fallen 21% in just five weeks.
A plethora of negative factors are currently weighing on the industry, including: rising returns prompting investors to rethink frothy valuations; shortage of semiconductors forcing electric car manufacturers to temporarily close some production lines; is concerned about increasing EV competition from Ford (NYSE :), General Motors (NYSE 🙂 and Volkswagen (OTC :).
Despite the recent downturn, there are more than a few attractive buy-the-dip names in the group worth considering. Here are three to consider:
1. Fisker: Next Big EV Market Disruptor
Percentage under ATH: 30.5%
Fisker (NYSE :), like many of the new recent EV startups to hit the market, chose to go public through a dedicated acquisition company (SPAC), rather than a more traditional IPO.
The Henrik Fisker-led automaker made its trading debut on October 30, 2020, following a blank merger with Spartan Energy Acquisition. The deal valued Fisker at $ 2.9 billion.
Fisker has been weathering some turbulence lately as the recent industry-wide sell-off took some wind out of the sails of the high flyers. After an increase of 94.5% in the first two months of the year, FSR share has fallen by 22.2% so far in March.
Shares ended Tuesday at $ 22.18, nearly 31% below their record high of $ 31.93 on March 2, bringing the Los Angeles, California-based electric carmaker to a market cap of $ 6.5 billion.
Fisker has the potential to become the next major disruptor in the EV market. The company recently announced that global paid reservations for its Fisker Ocean electric SUV, which has a starting price of $ 37,499, has risen more than 500% since mid-October to cross the 14,000 mark.
The company, which partnered with Magna International (NYSE 🙂 to produce the Ocean, plans to start production in the fourth quarter of 2022.
In a promising sign, Fisker recently signed a major manufacturing deal to partner with Taiwan-based Foxconn – best known for its role in assembling iPhones for Apple (NASDAQ 🙂 – to develop its second EV.
Production of the vehicle to be mentioned will start at the end of 2023. Volumes are expected to exceed 250,000, with the two companies saying manufacturing will take just 24 months.
2. Nio: China's Fast Growing EV Starter Leader
Percentage under ATH: 38.3%
Shares of Nio (NYSE 🙂 have seen a remarkable rise since falling to a bear market low of $ 2.11 during the peak of the March 2020 coronavirus-related selloff.
At one point, the shares of the Shanghai, China-based electric car maker – known as the Tesla of China – rebounded by more than 3,000% as investors piled up in the name of the electric car, amid evidence of strong growth in vehicle deliveries.
After rising to a record high of $ 66.99 on Jan. 11, NIO stock has since lost momentum, falling nearly 40% to $ 41.35 yesterday. At current valuations, the electric car manufacturer has a market capitalization of $ 67 billion.
Nio, the fifth largest automaker in the world by market capitalization, is poised to return to its recent highs in the coming months thanks to its growing status as one of the leading names in the fast-growing Chinese EV market.
The automaker, which currently has three electric car models for sale – all SUVs – delivered 17,353 vehicles in the period of 111% from the same period last year. That brought the total number of vehicles delivered in 2020 to 43,728, an increase of more than 113% year-on-year.
By comparison, last year's domestic vehicle deliveries by China-based rivals Li Auto (NASDAQ 🙂 and Xpeng Motors (NYSE 🙂 were 32,624 and 27,041, respectively.
Looking ahead, Nio sees first quarter deliveries in the range of 20,000 to 20,500 vehicles, which would be 421% -434% higher than the same period a year ago.
Last week, Xpeng predicted first quarter deliveries of 12,500 vehicles, while Li Auto gave the lowest Q1 forecast of the three, at 10,500 to 11,500 deliveries.
3. Canoo: High Risk, High Yield EV Start
Percentage under ATH: 50.9%
Canoo (NASDAQ 🙂 joined the wave of electric car companies who chose to go public via blank check when it completed a reverse merger with SPAC late last year Hennessey Capital . The deal valued Canoo at $ 2.4 billion.
Shares of the Los Angeles-based EV start-up, which was founded in late 2017 by a small group that split off from the EV company, traded on December 22, 2020.
After hitting as high as $ 24.90 a share on the first day of trading, GOEV shares have since fallen nearly 51% to $ 12.22 last night. The stock has a market capitalization of $ 2.94 billion.
While Canoo is still highly speculative, it could eventually become one of the most attractive growth opportunities for investors in the EV sector in the coming years, given the potential to create a variety of vehicles using its patented, scalable, low-profile steering gear. -by-wire EV platform, also called & # 39; skateboard & # 39; mentioned.
The EV company, which recommends a monthly subscription model, specializes in cars, vans, minibuses and commercial vehicles for rental and sharing services. It has also created the opportunity to develop an electric pick-up in the future.
Canoo & # 39; s first product, which the company describes as a & # 39; lifestyle car & # 39; or & # 39; loft on wheels & # 39 ;, will go into limited production in 2022. Commercial production and rollout of the multipurpose van (MPDV), which has a starting price of $ 33,000, is then scheduled for 2023.
In view of the buzz around Canoo and its innovative EV technology, Apple reportedly held meetings with the company in the first half of 2020, before being made public via the SPAC route. As part of Apple's secret effort to build their own electric car, the two companies discussed options ranging from investment to an acquisition, before the talks eventually fell apart.
