The competition in the Electric Vehicle industry is growing and while it is too soon to announce a winner, Tesla (NASDAQ:TSLA) is still considered as one of the leaders and the biggest industry players. To achieve the 2030 goal, governments across the world have been making every attempt to increase EV adoption and while we aren’t even halfway there, some EV companies are already enjoying the rising demand and growing revenues. This means EV stocks will be high in demand.
These EV companies are not merely manufacturing cars, but are offering an efficient mode of transportation and a cleaner future. If you are in the industry to make the most of the EV transition, here are three EV stocks to buy in October.
EV stocks to buy: Li Auto (LI)
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I have already written about Li Auto (NASDAQ:LI) in the past, and still recommend buying this EV stock. It is the best player in the industry today with ample upside potential. Li Auto is not just about promises, but it has delivered beyond the market expectations. The company has steadily reported strong deliveries which proves that its cars are high in demand, and consumers are satisfied with the same.
In September, the company delivered 36,060 cars, a 213% year-over-year rise. It is much ahead of its rivals today and each of its Li L7, L8, and L9 models has sold over 10,000 units this month. The company intends to triple the lineup by 2025 and this will mean even better deliveries.
Earlier, the company stated that it aims to sell 40,000 units each month in the final quarter of the year and it is inching closer to this number. The company has the monthly production capacity, as well as the demand to scale up. With an improvement in deliveries, the company has also seen better financials. In the second quarter, it saw a gross margin of 21.8% and a revenue of $3.95 billion. The outlook for the stock is bright and it still has a long way to go.
LI stock is trading for just $35, up 68% year-to-date (YTD). The stock could hit $40 before the end of this year. Since the company has already met its delivery projections for the third quarter, it will report stellar financials yet again. This is one EV stock that should be on your radar and it will generate significant gains in the near term.
BYD Co. (BYDDF)
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Warren Buffet’s favorite EV company, BYD (OTCMKTS:BYDDF) has produced more EVs than Tesla in the recent quarter. A top Tesla competitor, BYD Co. is a leader in the market and is steadily growing its global market. The company sold 431,000 BEVs in the third quarter while Tesla sold 435,000 electric cars. This means BYD is only a little away from overtaking Tesla as the biggest EV maker. When it comes to total sales, it is already far ahead of its rivals.
BYD Co. is also the second largest battery manufacturer in the world and since its parts are produced in-house, it has managed to keep the costs low while growing operating profit. Even as a battery maker, the company holds several advantages over lithium-ion batteries. BYD Co. makes Blade Battery which has higher efficiency and is produced at a lower cost.
It has strong financials and reported a 204% rise in profits in the first six months. The numbers are proof that BYD Co. is firing on all cylinders, and 2024 could be a big year for it. The company does not want to restrict itself to China and is aiming to double the export sales of vehicles to 400,000 in 2024. It has recently expanded in France, Japan, and Australia and is hungry for market share. Sales in Thailand have already reached a new high and now account for 47% of the local EV market.
It is also focused on commercial vehicles and aims to make the most of this opportunity. Trading at $31 today, the stock is moving closer to the 52-week high of $36. It is up 21% YTD, and is one of the EV stocks that has the potential to double your money.
Nio (NIO)
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Nio (NYSE:NIO) is another Chinese player who hasn’t had a good year due to supply chain issues and China lockdowns. While the company has managed to bounce back and report impressive numbers, it still has a long way to go. It delivered 23,520 cars in the second quarter and 55,432 in the third quarter. The company also benefits from Battery-as-a Service— this is one feature that sets it apart from other Chinese EV makers.
In August, the company delivered 19,329 cars, which is an 81% year-over-year rise. In September, it delivered 15,461 cars, up 44% year-over-year. In total, 109,813 vehicles have been delivered this year. Nio is also working on the launch of new models, which can improve its market position in the coming year.
What sets Nio apart from the other EV makers is its relentless commitment to safety. It is the first car brand to have achieved a five-star safety rating for its ET5 sedan and SUV EL7. They are working on ramping up the deliveries and want to achieve 30,000 deliveries per month. Exchanging hands for $8.97 today, the stock is highly undervalued and could double your money. The stock has dropped 30% in the year and has been dropping consistently in the past few weeks. NIO stock will take some time to bounce back, however it is poised for success.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.
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