If you didn’t notice the upward momentum of electric vehicle (EV) stocks in the latter half of 2020, you haven’t been paying attention. More countries than ever before are shifting priorities away from traditional fossil fuels and toward alternative energy sources; now, EVs are set to replace virtually all gas-fueled vehicles within the next 10-20 years.
EV stocks are already beginning to show signs of significant returns, but they aren’t the only ones to watch. Stocks tied to companies that produce EV batteries, infrastructure (e.g., charging stations) and software innovations (e.g., automated driving) should also pique your interest.
Here are a few that we’re tracking at TradePRO Academy:
AYRO Inc. (ARYO)
AYRO has created two smaller and more affordable EVs, the ARYO 311 and the Club Car 411. These models most effectively have been used as food delivery vehicles during the pandemic. Due to their EVs’ smaller size, ARYO can boast alignment with many governments’ environmental and climate goals while adhering to zero-emission and low-noise ordinances from those same governments.
This stock has a lot of making up to do from 2019 and before. We could see ARYO hit as high as $15 if it can break $11 in the coming weeks or months. Its next target high is $30/share.
Blink Charging (BLNK)
BLNK is on a mission to make EV charging infrastructure more accessible worldwide and has recently made rounds through the U.S., installing their stations in Texas. This company also possesses four innovative business models for their stations: Businesses can “host” a BLNK charging station, utilize BLNK’s stations as a service with low up-front costs, co-own a station with BLNK or allow BLNK to own the station outright.
BLNK has the potential for its stock prices to explode again. Should BLNK continue producing and distributing its EV charging stations, it has further potential for stock value to creep into the $85-$95/share region in the latter half of 2021.
Li Auto Inc. (LI)
LI is a smaller company that sees itself as an innovator ripe for China’s emerging EV market. In late 2019, it was the first Chinese company to commercialize long-range EVs for the local market successfully. Taking a page from Tesla’s playbook, LI focuses on autonomous driving solutions and extended EV driving range. They aim to expand their EV product line in the coming years to broaden their target consumer market.
LI’s 12-month forecast currently has a median target of $40.50/share, with a forecasted low of $21.67 and a forecasted high of $61.15. It would not be surprising for LI to hit their target median (or high) by the end of 2021.
Nio Inc. (NIO)
To date, NIO only recently has entered as a key player in the Asian EV market. The company also seeks to move into the European and North American markets via operational footprints in Oxford, England; Munich, Germany; and San Jose, CA, USA. These moves would pose NIO as a top competitor of both LI in the domestic Chinese EV market and TSLA in the global EV market. But NIO has shown a lot of potential; 2020 year-over-year (YoY) sales were up by nearly 150%. Though many people have reservations regarding NIO’s lack of factories, NIO does possess an amazing battery swap system.
NIO’s 12-month forecast is set at a median target of $68.90/share with a high target of just over $100/share. If NIO continues to grow on a similar track to 2020 and can manage to move into regions outside of Asia, NIO very well could become Tesla’s primary competition by 2025.
Xiaopeng Inc. (XPEV)
XPEV is a smaller Chinese company that has great potential to massively rival both LI and NIO in China’s domestic EV market. It’s a much newer company than its domestic competitors, with public trading only being made available in late August of 2020. Also, it’s smaller, with nearly 50% of the company’s employees dedicated solely to research and development (R&D) activities. But because XPEV remains hyper-focused on its vision of being a cross-sector leader in the global EV industry, its stock value per share has more than doubled.
Considering Xiaopeng Inc. essentially quadrupled its revenues between 2020’s Quarters 2 and 3, the recent flatline we’ve seen in XPEV’s stock performance is likely to begin creeping up towards its median target by Summer 2021. It potentially will hit its high target by year’s end.
This is only the beginning for electric vehicle stocks
Electric vehicle stocks are only beginning to boom. With governments transitioning from gas to electric power in North America, Europe and Asia, we will see reduced oil demand. But we will see greater demand for land, metals, ores, and more, which will be sought for EV technology production. These shifts will likely be seen in Europe first, as the UK has sought to end the sale of gasoline and diesel-powered vehicles by the next decade.
Victorio Stefanov is an options trader with TRADEPRO Academy, where he has mentored hundreds of traders on their paths to success over the past four years. Once a TRADEPRO student himself, Stefanov’s passion for options and futures trading is backed by precise technical analysis, as he heads the options desk daily.