Rising oil and natural gas prices, support from President Biden’s infrastructure spending bill, and an EV tax credit should boost the EV industry’s growth. Furthermore, EV manufacturers’ efforts to develop innovative fleet designs and improve battery technology should bode well for the industry. Indeed, the global EV market is expected to grow at a 15.4% CAGR to $187.94 billion by 2026.
Despite the global chip shortage and input price inflation, which are keeping EV makers under pressure, EV sales hit a record high in the fourth quarter of 2021. Many analysts expect the sales momentum to accelerate this year with the anticipated easing of the chip shortage. Investors’ interest in this space is evident in the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 6.3% gains over the past nine months.
Given this backdrop, Wall Street analysts are optimistic about the upside potential of EV stocks NIO Inc. (NIO), Arrival (ARVL), Sono Group N.V. (SEV), Lightning eMotors, Inc. (ZEV), and GreenPower Motor Company Inc. (GP).
Click here to checkout our Electric Vehicle Industry Report for 2022
NIO Inc. (NIO)
Dubbed the ‘Tesla of China,’ Jiading, China-based NIO designs, manufactures, and sells smart and connected EVs that are integrated with next-generation technologies and artificial intelligence. The company’s products include its EP9 supercar and ES8 7-seater SUV. It provides home charging, power express valet service, and other power solutions that include access to public charging, access to power mobile charging trucks, and battery swapping.
NIO delivered 9,652 vehicles in January 2022, representing an increase of 33.6% from the prior-year period. As of Jan.31, 2022, cumulative deliveries of the ES8, ES6 and EC6 reached 176,722 vehicles.
On Dec.18, 2021, NIO launched its ET5, a mid-size premium smart electric sedan, and expects to begin its deliveries in September 2022. The company is looking forward to seeing high demand for the vehicle.
For its fiscal 2021 third quarter, ended Sept. 30, 2021, NIO’s total revenues increased 116.6% year-over-year to $1.52 billion. The company had $3.35 billion in cash and cash equivalents as of Sept. 30, 2021. Analysts expect the company’s revenue to increase 120.8% year-over-year to $5.64 billion for its fiscal 2021, ended Dec. 31, 2021.
The stock has retreated 21.6% in price over the past month and closed yesterday’s trading session at $23.76. Of 10 Wall Street analysts rating the stock, nine have rated it a Buy, and one rated it Hold. The stock's $62.08 average price target indicates 161.3% upside potential.
Arrival (ARVL)
Based in Luxembourg, ARVL designs, researches, develops, assembles, and produces robotics and EVs. The company offers trucks, vans, buses, and other commercial vehicles, and operates in the U.K., U.S., Germany, and Russia.
On Dec.17, 2021, ARVL and Uber Technologies, Inc. (UBER), a mobility-as-a-service provider, unveiled the Arrival Car, a collaborative EV specifically designed for ridesharing. Despite sharing a similar footprint as the Volkswagen AG’s (VWAGY) Volkswagen Golf, the Arrival Car boasts more legroom than London’s Black Cabs. With production aimed for 2023, both companies expect heightened demand in the coming months.
ARVL’s net finance income came in at $20.39 million for its fiscal 2021 third quarter, ended Sept. 30, 2021, versus a $1.22 million loss in the prior-year period. The company had $380.70 million in cash and cash equivalents as of Sept. 30, 2021.
ARVL’s stock has declined 39.4% in price over the past month and ended yesterday’s trading session at $4.11. Of four Wall Street analysts that have rated the stock, three have rated it a Buy, while one rated it Hold. Analysts expect the stock’s price to hit $16.50 in the near term, representing 301.5% upside potential.
Sono Group N.V. (SEV)
Based in Munich, Germany, SEV manufactures and sells electric cars with integrated solar cells and mobility services. The company offers bidirectional wallbox, power-to-go technology, and variable battery solutions. It also develops an application that provides real-time vehicle data.
On Oct. 28, 2021, SEV announced that it had received 15,000 private reservations for its Sion, the world’s first solar electric vehicle (SEV). Even before commencing production, the company has booked a total order value of $385 million and plans to increase the net price of the Sion to $28,700 (€23,900). In addition to many German reservations, the company has received further European reservations.
SEV’s stock has declined 37.2% in price over the past month to close yesterday’s trading session at $5.63. Both Wall Street analysts rating the stock have rated it a Buy. SEV’s average price target of $22 represents 290.8% upside potential.
Lightning eMotors, Inc. (ZEV)
ZEV in Loveland, Colo., is an EV designer and manufacturer that provides electrification solutions for commercial fleets from Class three cargo and passenger vans to Class six work trucks and Class seven city buses. The company offers zero-emission battery-electric vans, trucks, buses, charging systems, and a charging-as-service platform. Its analytics software enables drivers and fleet operators to provide real-time recommendations about vehicle performance, routes, and charging strategies.
On Jan. 19, 2022, ZEV was selected as the powertrain provider for an all-electric motorhome concept developed by the Advanced Technology Group (ATG) of Winnebago Industries, Inc., a leading manufacturer of motorhome recreational vehicles (RV). The all-electric motorhome concept should enable ZEV to capitalize on the long-term growth prospects in the RV market and contribute to a more sustainable, energy-efficient line of products for the customers.
ZEV’s revenues for its fiscal 2021 third quarter, ended Sept. 30, 2021, increased 64.6% year-over-year to $6.26 million. The company had $187.24 million in cash and cash equivalents as of Sept. 30, 2021. Analysts expect the company’s revenue to increase 139.2% year-over-year to $21.74 million for its fiscal 2021, ended Dec. 31, 2021.
Over the past month, ZEV stock has declined 25% to close yesterday’s trading session at $4.35. All 3 Wall Street analysts rating the stock have rated it a Buy. The $14 average price target represents 221.8% upside potential.
GreenPower Motor Company Inc. (GP)
Based in Vancouver, Canada, GP designs, manufactures, and distributes electric vehicles for commercial markets in the U.S. and Canada. The company offers a suite of high-floor and low-floor electric medium and heavy-duty vehicles, including transit buses, school buses, shuttles, cargo vans, double-decker buses, and a cab and chassis. It sells and leases its vehicles to customers directly and through distributors.
On Jan. 12, 2022, GPV and Governor Jim Justice announced an agreement to construct a facility in South Charleston, W.Va., to manufacture zero-emission, all-electric school buses. The state of West Virginia has committed to purchase GPV vehicles worth $15 million produced at the facility. GPV plans to begin manufacturing at the facility by the second half of 2022. The opportunity should help expand its manufacturing operations in the region.
For its fiscal 2022 second quarter, ended Sept. 30, 2021, GP’s revenue increased 56.7% year-over-year to $4.44 million. The company’s gross profit came in at $952,991 for the quarter, marking a 7.8% year-over-year improvement. It had cash and cash equivalents of $8 billion as of Sept. 30, 2021. Analysts expect GP’s revenue to rise 103.8% year-over-year to $24.22 million in its fiscal 2022, ending March 31, 2022.
GP’s shares have fallen 28.1% in price over the past month and ended yesterday’s trading session at $6.27. Of the three Wall Street analysts that have rated the stock, two have rated it a Buy, while one rated it Hold. Analysts expect the stock’s price to hit $21 in the near term, representing 234.9% upside potential.
Click here to checkout our Electric Vehicle Industry Report for 2022
NIO shares were trading at $23.56 per share on Thursday morning, down $0.20 (-0.84%). Year-to-date, NIO has declined -25.63%, versus a -5.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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