Increasing sales of electric vehicles are good news for battery metals investors. Here INN looks at the top EV stocks to watch.
What a decade ago seemed far from becoming a reality is now part of the mainstream narrative — electric vehicles (EVs) and the energy revolution are here to stay.
Even amid the uncertainty COVID-19 has brought to the world, the shift toward green energy is gathering momentum, with places like Europe making it a central part of their economic recovery plans.
Increasing EV sales are good news for battery metals investors, as they drive demand for metals such as lithium and cobalt — key components in the cathodes of EV batteries.
Here, the Investing News Network has gathered a list of the top electric vehicle stocks by market cap listed on North American exchanges, with a focus on the batteries used for their current and upcoming models. The list was generated using YCharts on November 24, 2020. Only companies with an EV focus under the auto manufacturers industry filter are included.
1. Tesla (NASDAQ:TSLA)
Market cap: US$526.45 billion; share price: US$555.38
First on the list is of course EV maker Tesla, which has brought attention to the electric vehicle narrative since its beginnings in 2003. Fast forward to last year and Tesla sold 367,500 electric vehicles globally, including 223,000 in the US. The company currently has the capacity installed to exceed 500,000 vehicle deliveries this year, despite recent production interruptions.
A well-known story for battery metals investors, the Elon Musk-led company made headlines in 2014 with the groundbreaking of its first gigafactory in Nevada — an unthinkable proposition at the time. Since its launch, the batteries produced at the manufacturing facility in partnership with Panasonic (TSE:6752) have included nickel-cobalt-aluminum (NCA) cathodes — different from most of Tesla’s competitors, which use a nickel-cobalt-manganese (NCM) mix.
Since then, the top electric vehicle stock has opened a gigafactory in China, where it joined forces with China’s largest battery maker CATL (SZSE:300750) to develop batteries for its Model 3. CATL continues to work on its cell-to-pack technology to boost the density and safety of its lithium-iron–phosphate (LFP) batteries, which are cobalt free. South Korean LG Chem (KRX:051910) also supplies Tesla with batteries, but using lithium-nickel-manganese-cobalt oxides.
Tesla is set to open its first manufacturing facility in Europe by the summer of 2021. The factory, being built just outside of Berlin, Germany, could assemble as many as 500,000 cars a year.
In 2020, Musk dedicated an entire event to batteries, announcing everything from building a cathode plant in Texas and expanding Tesla’s battery production capacity to 3 TWh by 2030, to potentially extracting its own lithium from clay. Only time will tell how many of these goals the company will achieve, but one move is clear and taking place — the push for a North American supply chain.
Tesla has now signed a deal with Piedmont Lithium (ASX:PLL,NASDAQ:PPL) for spodumene supply, and has called on miners to mine more nickel for its batteries. Tesla has also negotiated a deal with Glencore (LSE:GLEN,OTC Pink:GLCNF) to supply cobalt from its Democratic Republic of Congo operations.
In 2019, the carmaker signed deals for raw materials with top Chinese lithium producer Ganfeng (OTC Pink:GNENF,SZSE:002460), plus Livent (NYSE:LTHM), Pure Energy Minerals (TSXV:PE), Bacanora Lithium (LSE:BCN) and Kidman Resources, which was acquired by Wesfarmers (ASX:WES,OTC Pink:WFAFF).
In the third quarter, Tesla produced just over 145,000 vehicles and delivered nearly 140,000. Looking ahead, the company is aiming to reduce costs to be able to offer a US$25,000 electric car in the next three years; it hopes to be able to eventually produce as many as 20 million cars per year.
2. Nio (NYSE:NIO)
Market cap: US$72.89 billion; share price: US$53.51
Founded in 2014, Chinese EV maker Nio designs, jointly manufactures and sells smart and connected premium electric vehicles. The company is backed by the ambitious goals set by China ― the government wants 25 percent of vehicle sales by 2025 to be new energy vehicles.
Of particular interest for battery metals investors should be Nio’s strategy, which includes its recently launched Battery as a Service program, a subscription purchasing model where buyers lease a vehicle’s battery. The idea behind the move is to reduce the cost of the vehicle itself.
There’s also an option for owners to swap empty batteries while on the road instead of waiting for them to be fully charged. Founder William Li Bin has said that Nio is building a new battery-swapping station in China every week and plans to build 300 new stations next year.
Battery as a Service is run by the Battery Asset Company, with Nio and CATL owning a stake. CATL already provides the battery cells used in the battery packs of Nio’s ES8, ES6 and EC6 models, which use NCM cathode chemistries. Model ES8 uses high-nickel NCM 811 cathodes. Guotai Junan Securities and Hubei Science and Technology Investment Group also hold interests in the Battery Asset Company.
In the third quarter of 2020, Nio’s vehicle deliveries came to 12,206, compared with 4,799 vehicles delivered in Q3 2019 and 10,331 vehicles delivered in the second quarter of 2020. For Q4, the company is expecting to increase that number to between 16,500 and 17,000 vehicles, representing an increase of more than 100 percent from the same quarter of 2019.
The company’s share price received a boost in October after JPMorgan (NYSE:JPM) upgraded it to “buy” and said that the Shanghai-based electric vehicle maker is set to be the “long-term winner” in China’s luxury electric vehicle market.
3. XPeng (NYSE:XPEV)
Market cap: US$51.89 billion; share price: US$70.63
Another Chinese EV maker focused on the smart electric vehicle market, XPeng offers two models, namely an SUV, the G3, and a four door sports sedan, the P7.
In a similar move to competitor Nio, XPeng has launched a pilot project for customers to rent a battery over a period of seven years. After that time, the vehicle buyer will own the battery — different to Nio’s program, where the battery will remain the company’s property.
The majority of XPeng’s EV components are purchased in China, and a significant portion of its suppliers are global companies with manufacturing facilities in China. Xpeng, which was founded in 2015, uses NCM cells for its batteries and has collaborated with CATL to develop the P7’s prismatic lithium NCM cells, which offer high energy density and low height.
XPeng also increased its car deliveries in Q3, reaching 8,578; that represents an increase of 265.8 percent from the third quarter of 2019 and an increase of 165.7 percent from the second quarter of 2020. For the fourth quarter, the company is also expecting to increase deliveries by more than 200 percent year-on-year, reaching 10,000 vehicles.
Looking ahead, XPeng is planning to build a new plant with financing from the government in Guangzhou. The new plant will be in addition to its wholly owned plant in Zhaoqing, Guangdong province, which has an annual production capacity of 100,000 units.
4. Li Auto (NASDAQ:LI)
Market cap: US$36.77 billion; share price: US$43.96
Top electric vehicle stock Li Auto bills itself as the first to successfully commercialize extended-range electric vehicles in China. The company started volume production of its first model, the Li ONE, in November 2019, and launched its initial public offering in July 2020.
One of the main differences with other companies on this list is that Li Auto’s ONE SUV allows drivers to charge the battery pack with electricity or gas, which is called extended-range EV technology.
In Q3 2020, the company set a new quarterly record for deliveries at 8,660, representing a 31.1 percent quarter-over-quarter increase. Li Auto is expecting deliveries of vehicles to be between 11,000 and 12,000 units in Q4, an increase of about 27 to 38.6 percent from the third quarter.
5. Nikola (NASDAQ:NKLA)
Market cap: US$13.25 billion; share price: U$34.50
Arizona-based Nikola is a designer and manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems and hydrogen station infrastructure. Founded in 2015, Nikola went public in June 2020 after merging with VectoIQ, a special purpose acquisition firm founded by former GM (NYSE:GM) Vice Chairman Steve Girsky.
2020 hasn’t been a particular easy ride for Nikola, with reports casting doubts over the company’s claims of having breakthrough proprietary technology. According to the Financial Times, the company had outsourced battery supplies for its first semi-truck model from California-based Romeo Power Technology. As a result of the allegations, Nikola is being investigated by the US Department of Justice and the US Securities and Exchange Commission.
The company, which has publicly rejected all the accusations, had been in talks with GM to supply batteries for its Badger pickup truck as part of a US$2 billion deal in which GM was said to be taking an 11 per cent stake in the company; however, negotiations are now uncertain.
During the third quarter, Nikola and IVECO began assembling the first five Nikola Tre BEV prototypes at IVECO’s industrial complex in Ulm, Germany, and recently completed the assembly of the first Nikola Tre. The second batch of prototype assembly is expected to begin in the first quarter of 2021.
Nikola plans to manufacture the battery-electric Tre by late 2021, and by late 2023, a fuel cell-powered version of that big rig at its own plant in Coolidge, Arizona, which is under construction.
6. Fisker (NYSE:FSR)
Market cap: US$4.43 billion; share price: US$15.97
Another top electric vehicle stock that went public this year is Fisker, which is hoping to achieve delivery of its Ocean SUV model in Q4 2022. The company will release more detailed specifications about its electric motors in 2021.
The Fisker Ocean will initially be manufactured exclusively by Magna International in Europe, using some of its EV platform combined with some intellectual property from Fisker. Magna previously owned a battery pack division that was sold to Samsung SDI in 2015.
Founder Henrik Fisker has previously been determined to build solid-state batteries for the company’s vehicles — a technology that is still in development stage. But since making claims of a fast delivery timeline in 2018, there hasn’t been much news about it.
7. NIU (NASDAQ:NIU)
Market cap: US$2.47 billion; share price: US$33.10
Chinese company NIU currently designs, manufactures and sells high-performance electric bicycles, mopeds and motorcycles.
Founded in 2014 and listed on New York’s Nasdaq four years later, NIU uses lithium-ion batteries instead of lead-acid batteries used by most of its competitors in China. The NIU battery pack is made up of Panasonic lithium-ion battery cells.
In Q3, the number of e-scooters NIU sold reached 250,889, up 67.9 percent year-over-year. In China, sales increased 70 percent, while in the rest of the world they increased by 6.3 percent year-over-year, impacted mainly by the rebound of COVID-19, according to the company. NIU is expecting to increase revenue in the fourth quarter to between 5 and 15 percent.
8. Workhorse (NASDAQ:WKHS)
Market cap: US$3.47 billion; share price: US$28.78
Workhorse is a technology company focused on providing electric mobility solutions to the transportation sector. As an American original equipment manufacturer, Workhorse designs and builds high-performance battery-electric vehicles, including trucks and aircraft.
Back in 2016, the same year it listed on NASDAQ, the company signed a deal with Panasonic for lithium-ion batteries for its battery-electric medium-duty trucks.
More recently, Workhorse selected EnerDel as an additional key battery supplier for its next-generation C-Series delivery vehicle. Privately held EnerDel is a supplier of advanced lithium-ion batteries and electric systems solutions for heavy-duty transportation headquartered in Indianapolis, Indiana.
Workhorse said in its Q3 release that it would not be able to provide an accurate estimate of deliveries for Q4 — its main battery supplier could not meet the volume requested due to capacity issues and COVID-19-related slowdowns. Despite this, the top electric vehicle stock has set a production volume target of 1,800 vehicles for 2021.
9. Electrameccanica (NASDAQ:SOLO)
Market cap: US655.77 million; share price: US$8.43
Canadian EV designer and manufacturer Electrameccanica was established in 2015 with a flagship vehicle called the SOLO. The Vancouver-based company is aiming to launch the three wheeled electric car in Los Angeles in late 2020. The SOLO is powered by a 17.3 kWh NCA battery that’s liquid-cooled.
In Q3, the company started production and successfully delivered its first shipment of SOLO EVs into the US; they will be used for specific activities such as press events, among others. The company also revealed initial concepts for the utility and fleet version of the SOLO EV, which is expected to become available in early 2021.
10. Greenpower (NASDAQ:GP)
Market cap: US326.51 million; share price: US$25.77
Another Canadian company making the list, Greenpower is the manufacturer and distributor of all-electric charter, school and city buses. Founded in 2010, the company has its primary manufacturing and fleet operations in Porterville, California. Greenpower uses LFP batteries for its fleet.
During the fiscal second quarter ended in September, the company increased production of its EV Star model to 20 per month; it expects to start delivering in two quarters, representing potential quarterly revenue of over US$8 million. It also kicked off production of 5 BEAST school buses per month, and aims to start delivering in mid-2021; those represent potential quarterly sales of over US$5 million;
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Piedmont Lithium is a client of the Investing News Network. This article is not paid-for content.