Tesla, GM, and 3 Other Stocks That Could Be Best EV Plays

Jan 31, 2022

Tesla, GM, and 3 Other Stocks That Could Be Best EV Plays

Electric automobiles are eclipsing gasoline-powered vehicles. This translates into an opportunity for investors. While EV sales are increasing, investors must still be able to sort the wheat from the chaff. Investors, according to research firm Fundstrat, should look up and down the value chain — from materials suppliers to automakers — to maximize their profits from the EV boom.

Battery-electric vehicle sales in the United States are expected to increase by about 50% by 2021, while sales in China are expected to increase by approximately 170 percent. For the entire year of 2021, China's EV penetration rate was around 15% of new-car sales. The United States' penetration of all-electric and hybrid-electric cars was lower, at around 5%, but estimates indicate that the country's EV penetration would reach 40% to 50% by the end of the decade. President Joe Biden's objective is to achieve a 50% penetration rate of new-car sales.

According to the data, EV sales in the United States are expected to nearly double over the next eight years, or 33 percent each year on average. Such growth will result in substantial stock gains.

The dilemma is, however, for which stock. Profit margins are rather slim on automobiles, and customers are notoriously fickle in their purchasing patterns and brand loyalty," Fundstrat noted last week in a research paper. Selecting a few EV manufacturers may not be the best idea. "We will consider not just direct exposure to producers of electric vehicles, but also other novel methods of exposure."

The research firm has selected five companies, one from each of the five segments of the EV value chain: materials, suppliers, semiconductors, autonomous driving, and automakers.

While autonomous driving may appear to be unrelated to the EV theme, as cars get more electric, they become smarter, with more software and semiconductors handling everything from charging times to power output. Self-driving capabilities and electric vehicles will coexist in the future years.

EVs, of course, require a large number of batteries, each of which contains a significant amount of lithium. Fundstrat's material selection is Albemarle (ALB), one of the world's major lithium miners. "This is a 'picks and shovels' approach to the EV revolution," Fundstrat noted. "We also admire the company's capital discipline and professional management team. Apart from lithium mining, they have other successful businesses."

Aptiv (APTV) is Fundstrat's preferred supplier. The firm manufactures both electrical components and self-driving vehicles. "It will gain regardless of whether the main OEMs succeed in EV dominance," Fundstrat says.

The research firm's pick for the EV trend is Taiwan Semiconductor Manufacturing (TSM), which Fundstrat describes as the "undisputed leader in the creation of the cutting-edge semiconductors essential for effective autonomous driving."

Fundstrat's foray into self-driving vehicles may surprise investors. It is Tesla (TSLA). Tesla, of course, is the world's largest manufacturer of all-electric automobiles. However, the corporation has made significant investments in self-driving technology. "The company's innovation-first culture has resulted in significant technology advancements that will be tough for competitors to match," Fundstrat says. "They have laid a lot of foundation in the field of autonomous driving, and we believe they will continue to be a leader."

That leaves Fundstrat's preferred automaker: General Motors (GM). "GM is making a significant investment in the electric vehicle market," Fundstrat says. Between 2021 and 2025, the corporation plans to invest $35 billion to bring dozens of new electric vehicles to market. "We believe this is a revived company with a realistic EV growth strategy."

It's an eclectic bunch. GM stock is currently trading at a seven-to-one multiple of expected 2022 earnings. Tesla's stock is currently trading at 83 times its book value. Over the last year, the group has averaged a return of around 5%. The S&P 500 and Dow Jones Industrial Average have increased by 19% and 16%, respectively, over the same time period. Only Albemarle and Tesla stock have increased in value during the last 12 months.

That simply suggests that the best is yet to come for Fundstrat.

Subscribe Our Newsletter

Stock Market News Live Updates: Stock Futures Open Lower After S&P 500 Posts Worst Month Since March 2020
Stock Market News Live Updates: Stock Futures Open Lower After S&P 500 Posts Worst Month Since March 2020

Futures on Wall Street's major indexes fell just below the break-even point in post-market trade on Monday, after equities rose previously in the session to end an extremely turbulent January in positive.

Stocks
Fed Faces Another Challenge as It Starts Rate Hikes: Treasury Market Volatility
Fed Faces Another Challenge as It Starts Rate Hikes: Treasury Market Volatility

Whatever the reason for the movements in Treasuries, the market's choppy trading has caused Bank of America analysts to "raise the alarm" on Treasury market liquidity difficulties in a March 8 note.

Banks and Finance
B2BROKER Liquidity B2BROKER Liquidity
Sponsored
Alexander

From Gold to Index Funds and Crypto: Where to Invest in 2023 for Long Term?
We are all familiar with the phrase "time is money", but usually without realising how true it really is. This has been proven repeatedly for those who have invested wisely in the past three decades.

discover
What Is SWIFT Banking System?

Tamta

What Is SWIFT Banking System?

If you've ever received or dispatched funds to a destination beyond your home country's borders, you've likely encountered the SWIFT banking system. This quiet workhorse in the background of international finance plays a vital role in your ability to smoothly transfer money around the globe, often within a matter of hours.

Fintech
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Hazem

    Grok vs ChatGPT: What’s the Best AI Assistant You Need in 2025

    Grok vs ChatGPT

    Сonstantine

    How to Choose the Right Liquidity Provider for Your Brokerage

    How to Choose the Right Liquidity Provider for Your Brokerage

    Сonstantine

    Low-Latency Trading Defined: Speed, Strategy and Technology

    Low-Latency Trading Explained

    Hazem

    How Liquidity Depth Affects Slippage in High-Volume Trading

    Liquidity depth and slippage in trading

    Hazem

    What is FIX API Liquidity Connection and How Does it Power Institutional Trading?

    FIX API in institutional trading

    Сonstantine

    OTC Trading Strategies and Technologies to Succeed in Over-the-Counter Markets

    OTC Trading Strategies

    Alexander

    What is OTC Trading? A Complete Guide for 2025

    what is OTC

    Alexander

    Synthetic Futures: A Trader’s Guide to Replicating Positions with Options

    How to Trade Synthetic Futures

    Сonstantine

    Order Book Depth: What It Is And Why It Matters?

    Order Book Depth What It is And Why It Matters

    Alexander

    Spot vs Perpetual Futures: Which Is Right for You?

    Spot vs Perpetual Futures explained

    Hazem

    5 Reasons Traders Are Switching to Perpetual Futures

    5 Reasons to Switch to Perpetual Futures

    Constantine

    Top 3 Liquidity Challenges Facing New Exchanges and How to Solve Them

    Top 3 Liquidity Challenges Facing New Exchanges Today

    Constantine

    Financial Planning in the Cryptocurrency Era — Master Crypto and Digital Asset Strategies

    Financial Planning in the Cryptocurrency Era

    Hazem

    Best Platforms to Trade Perpetual Futures in 2025

    Best platforms to trade perpetual futures in 2025

    Alex

    Top 10 Fintech Website Development Agencies for 2025

    Best Fintech Website Development Agencies for 2025

    Сonstantine

    Internal vs External Range Liquidity In ICT Trading Explained

    Internal vs External Range Liquidity In ICT Trading

    Constantine

    Portfolio Backtesting — Tools, Metrics, and Methods Explained

    Portfolio Backtesting

    Сonstantine

    ICT Trading Explained: Smart Money Concepts, Tools and Setups

    ICT Trading Explained

    Сonstantine

    CFD Trading Strategies: A Practical Guide to Risk and Execution

    CFD Trading Strategies

    Alexander

    What is a Fair Value Gap? A Guide to Trading Market Imbalances

    What is Fair Value Gap

    Vitaliy

    Triangle Patterns in Trading: Mastering Ascending, Descending & Symmetrical Strategies for Maximum Profit

    Triangle Patterns in Trading: Ascending, Descending & Symmetrical Guide

    Alexander

    What Is COTI? Payments, Token & Price Prediction

    What is a COTI coin

    Constantine

    Best Copy Trading Software in 2025

    Best Copy Trading Software in 2025

    Alex

    What Is an AI Agent? The Future of Finance Explained

    AI Agent Explained
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.