Should You Dump Tesla But Buy EV ETFs Now?
Zacks Investment Research | Feb 26, 2021 02:30AM ET
One of the hottest tickers of Wall Street that has jumped more than 1000% in the past two years – Tesla (NASDAQ:TSLA) (the supply chain woes .
However, this doesn’t mean your dream of investing in the electric vehicle (EV) area is doomed or that you should stay away from one of the most promising investment areas now, i.e., EV. Most recently, Nikola KARS ) has a P/E of about 26.46X.
The ongoing tech volatility doesn’t hurt the long-term prospects of the electric vehicle market. There has been a global drive on auto manufacturers to cut CO2 emission. The very move to bolster clean energy has led to auto manufacturers’ shift from ICE (NYSE:ICE) to EV. Europe and China have apparently been leading the way in CO2 emission, thus promoting EV sales.
Per Deloitte , China will hold 49% of the global EV market by 2030, Europe will account for 27%, and the United States will take about 14% share. Deloitte also forecast that China will achieve a domestic market share of about 48% by 2030, while the United States will have it at 27% and Europe is expected to hold 42% share.
The U.S. EV market is almost being supported by Tesla alone while catering to almost half of all EV sales. But Apple (AAPL ) said that it is foraying into the electric vehicle segment. The iPhone maker said it will have a brand-new battery technology, and plans to deliver its first EV sometime in 2024.
In the recent past, more than 10 automakers have come up with their EV plans. If these plans materialize, the sector will be able to manufacture and sell about target of 1 million EV sales by 2025.
General Motors shares touched their highest levels recently since the company's post-bankruptcy IPO in 2010, after the automaker announced its entry into the electric delivery vehicle business . GM's first BrightDrop commercial vans are expected to be delivered to FedEx (NYSE:FDX) later this year.
EV king Tesla has not yet entered the EV delivery business, though startups such as Rivian, Arrival and Canoo (that are developing electric commercial vehicles for customers ranging from Amazon (NASDAQ:AMZN) to Hyundai Motor) have a considerable presence in that field.
Chinese carmaker NIO is competing for a share of the EV services market, launching a Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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