Three Ways To Invest In EV That Aren’t Tesla
MarketBeat.com | Sep 15, 2020 01:16AM ET
The Electric Car market is going to be huge. If even only 10% of all cars globally go EV we’re still talking about exponential growth over the coming years. Total car sales are expected to top 70 million units globally in 2020 even with the pandemic and only a fraction of those are EV.
Tesla (NASDAQ:TSLA) is by far the most prominent of the EV carmakers and has a big head start but even it is not immune to competition. At today’s valuations, and after the S&P 500 snub, there is really no reason to want to buy Tesla while there are other choices patiently building their brands in preparation for the future of autos.
Simply looking at the U.S. data, there is still a lot of room for the EV market to grow. The estimated annual car sales are 12.5 to 14.5 million with only about 330,000 of those expected to be electric. That’s only 2.3% to 2.6% of the total market and Tesla is far less than 100% of the EV market. There are other good EV investments to be made.
h2 Nikola: The Next Tesla/h2Shares of Nikola (NASDAQ:NKLA) went on a wild ride last week but there is one thing clear, this company is on track to be the next Tesla. The company just inked a deal with GM that has it set up to mass-produce its vehicles within the next three years. The Badger, the company’s flagship model, is a far more attractive and useable version of a light truck than Tesla’s futuristic design and one that could take market share from the likes of Ford. One of Nikola’s many goals is to rival the F-Series for market dominance.
The opportunity for investors today is two-fold. First is the long-term opportunity in the stock. Even without last week’s volatile rideshares are cheap in light of the deal with GM. The deal with GM legitimizes what was before a small, niche operator and puts it on track exponential growth over the next five to ten years. The second opportunity is the short-selling issue. The short-sell report issued by Hindenburg has shares trading at a four-month low and near a significant support level.
Ambarella (NASDAQ:AMBA) is more widely known for its contributions to GoPro’s success but that is not the end of the story. The company is a driving force in the field of computer visualization and has a healthy exposure to the EV market. The company recently released 2Q earnings results that beat consensus and driven by results in the AI/CV/EV segment. Shares of the stock appear to be putting in a bottom following some recent analysts upgrades. Ambarella is also well-positioned for the 5G revolution.
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“We remain confident 10% of our total revenue will be earned from CV products in fiscal year 2021. Moreover, our automotive sales funnel is beginning to build, with more than three dozen unique automotive customers assessing and/or developing CV-based products during Q2. Our automotive wins, year-to-date, represent lifetime revenue of approximately $200 million," says Ambarella CEO Fermi Wang.
Nio (NYSE:NIO) Limited is a Chinese-based EV manufacturer with operations in China, the U.S., and the EU. The company, like most EV company’s, is a niche-operator offering a single type of vehicle, SUVs. Nio has models seating 5 to 7 people making it an attractive takeover or merger possibility for any major manufacturer looking to expand. The stock has been getting boost after boost over the past few months including upgraded sales outlook for China and globally, and bullish chatter out of the analyst’s community. According to Deutsche Bank (DE:DBKGn) Nio Limited is the leader of China’s fab-four EV automakers and expected to coexist with Tesla over the long-term.
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