The electric vehicle (EV) industry is going through a transitioning phase currently, where the odds of declining demand are taking over the benefits of owning and driving an EV. Yet, analysts are raving about the future potential of certain EV players, other than Tesla (NASDAQ:TSLA). On TipRanks, the 5 EV stocks discussed below attract a Strong Buy consensus rating and have a meaningful share price appreciation in the next twelve months.
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A lack of widespread charging infrastructure and a premium price for EVs, coupled with the ongoing interest and inflation challenges, are expected to hamper demand in the near term. Despite that, the targeted transformation toward decarbonization by countries worldwide will eventually see EVs capturing a larger market share of the overall auto market. And while we are yet to get there, it is best to invest in stocks that are poised for stupendous growth in the years to come.
With this background in mind, let us learn about the 5 Best EV stocks (not Tesla) to buy in March.
#1 Li Auto (NASDAQ:LI)
Chinese EV maker Li Auto engages in the design and manufacturing of premium smart electric SUVs with extended-range technology. Li is a dominant player in China’s new energy vehicle (NEV) market, having launched mostly plug-in hybrid electric models so far. However, last week, Li began deliveries of its first all-electric MPV (multi-purpose vehicle), the Li MEGA.
Meanwhile, Li Auto’s deliveries in February 2024 grew 22% year-over-year but came in much lower than January’s number. Even so, the company has guided for 50,000 auto deliveries in March, including MEGA’s orders.
As per the latest stats of insurance registrations of new carmakers in China for the week of March 3 to 10, Li Auto’s registrations jumped 50% week-over-week to 9,300 units. The news pushed LI stock up 8.9% on March 12.
What is the Future Price of Li Auto?
Yesterday, Morgan Stanley analyst Tim Hsiao lifted the price target on LI to $74 (86.3% upside) from $63 while maintaining a Buy rating. Hsiao increased the total sales volume forecast for 2024 and 2025, backed by higher demand for Li’s new models. Despite near-term challenges, Hsiao also increased the gross margin forecast by 1% and earnings by 41% and 34% for 2024 and 2025, respectively.
Overall, with ten unanimous Buys, LI stock has a Strong Buy consensus rating. The average Li Auto share price forecast of $56.71 implies 42.8% upside potential from current levels.
#2 Canoo (NASDAQ:GOEV)
California-based Canoo is a relatively newer player in the EV market, with a line-up of electric vans, MPVs, and pickup trucks. While the company just entered its revenue generation phase in Q3 FY23, its future looks bright. Canoo recently announced a 1-for-23 reverse stock split (effective March 8, 2024) to comply with Nasdaq’s listing rules.
GOEV stock has lost nearly 90% in the past year due to its weak financial performance. The company is burning cash as any new growing entity. Despite reporting revenues in Q3, it posted a gross loss. The EV maker is facing its fair share of challenges and undertaking steps to improve its condition.
Canoo recently added two EV veterans to its board of directors. Further, in January, it acquired manufacturing assets at a nearly 80% discount to increase the output at its Oklahoma facility.
Interestingly, Canoo started delivering its first electric vans to corporates in February and has agreements with the U.S. Post Office and Walmart (NYSE:WMT). Canoo is set to release its FY23 results on April 1, after market close.
What is the Future of Canoo Stock?
Three analysts who rated GOEV in the past three months have a unanimous Buy rating on Canoo shares.
Alliance Global Partners analyst Poe Fratt adjusted the stock price to $20 (1370.6% upside) to reflect the split and has a Buy view on GOEV stock.
#3 BYD Co. (OTCMKTS:BYDDF)
BYD has proven to be the unbeatable EV maker in the Chinese market, taking over Tesla in Q4 last year. Yet, challenges persist for the company as the global demand for EVs slows down. The automaker has huge inventories in the international markets.
BYD continues to capture a larger share of the pie, with insurance registrations in China growing by 27.5% to 49,100 units in the week of March 3-10. The company sees itself in the midst of an intense price war, cutting down prices of its starting range and premium EVs both in the home and export markets. At the same time, BYD is trying to lure investors by undertaking a new stock buyback plan of ¥400 million, thus, reducing float and increasing shareholder returns.
Is BYDDF a Good Stock to Buy?
BYDDF stock has a Strong Buy consensus rating on TipRanks backed by three unanimous Buys. The average BYD Co. Ltd share price target of $37.92 implies 42.6% upside potential from current levels.
#4 Blue Bird (NASDAQ:BLBD)
One of the lesser-known EV companies is Blue Bird Corporation. The company specializes in manufacturing electric school buses (in addition to traditional buses) and is venturing into the electric public bus market.
On January 16, Blue Bird received an order of 180 all-electric school buses from the Los Angeles Unified School District (LAUSD). BLBD will fulfill the order in parts, the first to be delivered by October 2024 and the rest by early 2025.
In the Q1 FY24 results, BLBD reported a 35% year-over-year jump in net sales and adjusted diluted earnings per share came in at $0.91, much higher than the $0.30 loss reported in the prior year quarter. The company sold 2,129 buses in Q1, up 9% year-over-year. It ended the quarter with 4,600 units in order backlog, including 400 e-buses.
Is Blue Bird Stock a Buy?
With seven unanimous Buys, BLBD stock commands a Strong Buy consensus rating on TipRanks. The average Blue Bird Corp. share price target of $37.25 implies 13% upside potential from current levels. Meanwhile, BLBD stock has already gained 62.2% in the past year.
#5 Rivian Automotive (NASDAQ:RIVN)
Rivian is one of the better-known EV manufacturing companies that focuses on specialty vehicles such as pickup trucks, commercial delivery vans, and SUVs. Currently, Rivian is facing a slew of headwinds, including proving its financial stability and sales performance. In Q4 FY23 results, Rivian posted a wider-than-expected loss and guided for weaker production in 2024.
Even so, Rivian recently launched R2, its five-seater mid-size SUV, R3, a mid-size crossover, and R3X a performance variant of the R3.
Furthermore, Rivian announced $2.25 billion in cost savings by halting construction at its Georgia plant. The company is shifting the production of the R2 SUV to its Normal, Illinois plant, which will lessen both the cost and time of manufacturing.
Is RIVN a Buy, Sell, or Hold?
Analysts have given mixed reviews about Rivian’s new vehicle launches. Nonetheless, their price targets indicate a massive upside in the next twelve months.
On TipRanks, RIVN stock has a Moderate Buy consensus rating based on 12 Buys, nine Holds, and three Sell recommendations. The average Rivian Automotive share price forecast of $17.95 implies a 45.1% upside potential from current levels. In the past year, RIVN stock has lost 9.9%.
Key Takeaways
The EV industry, supposedly a disruptor of the automobile market, has slowed down due to global macro headwinds. Having said that, investors should consider investing in EV stocks, given that massive demand is expected in the years ahead. The above five stocks have won analysts’ favor and show an attractive upside potential. Investors could consider these before making EV investing decisions.
