These Are The 5 Best EV Stocks To Buy

EV stocks have multiplied in Tesla’s (TSLA) wake and as electric cars look to go mainstream — but not all are created equal. Some car stocks are more ready than others for an electric future. Here are the top-rated EV makers and EV-related plays.

Best EV Stocks To Buy Or Watch

The charts of most EV stocks are under strain. Broadly, both established automakers and startups are a speculative bet on electric vehicles, itself seen as a nascent field. They have suffered as a risk-off sentiment prevails in the current market, and as shortages of key components drag on.

The electric-car stocks and EV plays below have the best mix of fundamentals and technicals.

Tesla Stock

Tesla stock, the top auto and EV stock by market capitalization, has an IBD Composite Rating of 95 and an EPS Rating of 77. Tesla (TSLA) also earns an RS Rating of 94, meaning that it has outperformed 94% of all stocks in IBD’s database over the past year.

The IBD 50 stock offers an aggressive entry as it moves above 300 and snaps a downtrend from the April high. Investors also could use the short-term high of 314.64, set on Aug. 16, as an early buy point.

The official buy point is 384.35.

Tesla makes four models, primarily the Model 3 sedan and the Model Y crossover SUV. It also plans the Cybertruck, Semi and Roadster, for which launch dates have been pushed back. The global EV leader expects to grow vehicle deliveries 50% annually. In 2021, EV deliveries surged 87% to nearly a million.

WOLF Stock

Wolfspeed (F) has a Composite Rating of 87, EPS Rating of 58 and RS Rating of 98.

A semiconductor manufacturer, WOLF stock is seen as a play on the growth of electric vehicles. The company makes silicon carbide chips, which can handle higher voltages and are more power efficient than traditional silicon chips. That could mean faster EV charging and improved driving range. WOLF stock earns a spot on the IBD Leaderboard. Peer ON Semiconductor (ON) is on the IBD 50 list.

Nio Stock

Nio (NIO) has a Composite Rating of 31, EPS Rating of 2, and RS Rating of 38.

As investors look for a turnaround, Nio stock has staged a strong rally from its May low. It now shows a 24.44 buy point from a bottoming base. Shares rallied on expectations for a recovery in Nio deliveries.

New Nio EVs and refreshed older models could fuel the Chinese EV startup’s return to growth. Nio is sometimes called the Tesla of China because of its premium, high-tech EV models.

New and upcoming models include the full-size ET7 sedan, mid-size ET5 sedan and ES7 SUV. Nio’s taking some of those EVs to Europe as well. Older-gen models include the ES6, ES8 and EC6, which continue to sell reasonably well.

CHPT Stock

ChargePoint stock bears a Composite Rating of 57, EPS Rating of 10, and RS Rating of 86.

ChargePoint offers 200,000 public places to charge across its EV charging network in North America and Europe. It should benefit from the Inflation Reduction Act, which aims to boost EV charging infrastructure in the U.S. The dearth of public chargers is a bottleneck in the adoption of electric cars.

SQM Stock

Sociedad Quimica y Minera, or SQM, carries a 98 Composite Rating, 89 EPS Rating and 98 RS Rating.

Chile’s SQM is riding the global adoption of electric vehicles, which use lithium batteries. Demand for lithium, a critical EV battery material, has been outpacing supplies, sending prices soaring.

SQM also produces iodine and potassium, used in X-rays and fertilizers respectively.

Are EV Stocks A Good Buy?

Companies with two characteristics generally make the best candidates for stocks to buy and watch, according to CAN SLIM guidelines. First, they need a strong track record of earnings growth. Second, they should be technically strong and be shaping bullish chart patterns.

Most of the new EV startups have neither. Those EV stocks include Fisker (FSR), Canoo (GOEV), Faraday Future (FFIE), Lordstown (RIDE) and Xos (XOS). In fact, many of the startups aren’t producing electric vehicles yet.

However, Lucid Motors (LCID) and Rivian Automotive (RIVN) have begun selling their first EVs.

Meanwhile, Chinese EV startups like Nio (NIO), Xpeng (XPEV) and Li Auto (LI) sell tens of thousands of vehicles, but remain unprofitable for now. Then there are legacy auto giants like General Motors (GM), Ford (F) and China’s BYD Co. (BYDDF) that are transforming into EV powerhouses.

EV Battery Stocks, EV Charging Stocks

The growing universe of EV stocks doesn’t end with carmakers. A constellation of other companies provide car batteries, car charging stations, electric motors and other EV-related products. Among them are ChargePoint (CHPT), EVgo (EVGO), Blink Charging (BLNK) and Wallbox (WBX).

Hyliion (HYLN) is developing electric powertrains for big-rig trucks. Romeo Power (RMO) makes battery packs for commercial EV fleets. QuantumScape (QS) targets solid-state lithium metal batteries.

Magna (MGA) supplies battery enclosures and e-drive gearboxes. It’s also an EV contract manufacturer.