As the world grapples with the challenges of climate change, more and more car manufacturers are turning to electric vehicles (EVs) as a way to reduce their carbon footprint. In turn, as a result of this trend, a myriad of promising EV startups have emerged, particularly in China, the world’s fast-growing electric vehicle market.
But it’s not just consumers who are spotting this trend. Investors are also getting in on the action by putting their money into what they believe could be the real winners in the very competitive EV industry.
Having said that, Finbold has handpicked three EV stocks that have the potential to witness enormous growth in 2023.
XPeng (NYSE: XPEV)
Year-to-date, the EV maker’s shares are down around 6.5%, likely due to the company’s pressured deliveries and margins amid the EV pricing war in China. At press time, XPEV was trading at $9.51 per share, down 2.96% in the previous 24 hours.
However, the Guangzhou-based automaker remains bullish on its future prospects. XPeng’s new P7i sports sedan launched in March saw strong demand in recent months. As a result, XPeng is now significantly ramping up production to speed up customer deliveries of P7i.
In total, the carmaker delivered 7,079 vehicles in April, up 1.1% from a month earlier. This marked XPeng’s third month-over-month increase in deliveries as the company continues to recover from a year-long period of poor sales.
At its tech day in October 2022, XPeng revealed major technological developments in robotics and flying vehicles, shortly after completing its first global public flight with its X2 flying car.
Based on views by 8 Wall Street analysts, the projected average 12-month price target for XPEV currently stands at $10.09, with a high forecast of $12.50 and a low forecast of $7.21. The average price target implies a potential 6.10% upside from the last closing price of $9.51. Based on their projections, the consensus rating of NIO on TipRanks is ‘hold.’
Nio (NYSE: NIO)
Also based in China, Nio reported strong sales in April, delivering 6,658 vehicles, up 31.2% from the same month last year. The surge in deliveries was driven by Nio’s steady ramp-up in production and sales of its luxurious SUV coupe, EC7.
The company also debuted a new All-New ES6 model last month, an electric all-around SUV.
Compared to big EV companies like Tesla, Nio’s shares trade at a notably lower price/sales ratio. That discount has widened even further this year, as Nio’s share price remains down nearly 88% from its all-time high of $62.84.
Notably, this sizeable discount could present a unique opportunity for investors to accumulate NIO as the company continues to show promising performance.
At the time of writing, Nio was trading at $7.91, down 4.12% on the day. Since the start of the year, Nio’s shares lost nearly 18% of their value.
Over the past three months, 9 analysts at TipRanks offered an average 12-month price target of $14.92, suggesting a possible +88.62% change from the last price of $7.91. Based on their projections, the stock’s consensus rating is ‘moderate buy.’
Li Auto (NASDAQ: LI)
Founded in 2015, Li Auto is another startup fighting for its market share in the competitive EV market in China. But in contrast to its rivals, Li’s stock performed surprisingly well in 2022, dropping just 5% in what was a catastrophic year for electric car company stocks.
The carmaker recently delivered 52,584 vehicles in Q1 2023, marking an outstanding year-over-year increase of 66%. For the full 2022 year, the company sold 133,246 cars, up 47% from 2021. Its revenue figures for 2022 were even more impressive, up 67% from a year earlier.
In addition to growing deliveries, Li Auto continues to make large-scale investments in vehicle design and engineering, intelligent systems, and self-driving technology. In opposition to some of its rivals, the company is targeting the premium SUV segment of the Chinese EV market, which could help it stand out from the competition and attract more investors.
At press time, Li Auto’s shares were trading down 0.13% at $29.96. However, compared to its local peers, Li’s stock saw a much better performance in 2023, rising almost 38% year-to-date.
LI is currently rated as a ‘strong buy’ on TipRanks, based on 8 analysts’ forecasts in the past three months. The average 1-year price target stands at $38.54, implying a potential upside of 28.84% from the current price level. The high and low forecasts stand at $54.30 and $31.00, respectively.
In summary, the EV industry continues to grow at an accelerating pace, with promising startups and established companies alike vying for market share. XPeng, Nio, and Li Auto are among EV stocks that could potentially experience robust growth in 2023, as they continue to aggressively develop and refine their technologies, ramp up production, and extend their market reach.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.