WHY ELECTRIC VEHICLE STOCKS ARE A GOOD GROWTH SECTOR
There's a reason 14 major automobile companies have electric vehicles for sale in the US. That reason is their collective belief in the future of the product. Based on sales figures for 1Q21, they're right. Electric vehicle sales in the first quarter were up 44.8% over 2020, with nearly 100,000 electric vehicles purchased in the US. That number is for battery-only electric vehicles. These are key stocks at which to look.
TESLA INC (NYSE: TSLA)
Tesla is the major player in electric vehicles. It has four models on the market, ranging in price from $41,000 to $86,000, making Tesla affordable to most car buyers. The company's growth has not slowed because of the pandemic; Tesla delivered a 40% growth year-over-year, 2020 v 2019, selling over 290,000 vehicles in 2020. An important fact for investors is that Tesla is diversified. It also manufactures its own electric batteries, supercharger stations, and service centers. Tesla is also a player in the solar energy field.
NIO INC - ADR (NYSE: NIO)
NIO has four models on the market, three SUV body styles, and one sports coupe. The company has struggled to sell vehicles in the United States but made an important move in May 2021. It announced that it will begin selling cars in Norway in September 2021. That's important because Norway is the world leader in the purchase of electric vehicles by percentage. Nearly 75% of all new vehicles purchased in Norway are EVs. NIO's business is primarily in China, where there are some four million EVs on the road.
LI AUTO INC (NASDAQ: LI)
Li Auto is a China-based company that designs, manufactures, and sells electric SUVs, competing directly with Tesla and NIO. Li offers one model, the Li ONE. The Li stock dropped at the beginning of 2021, but the company is rebounding. Even with the global chip shortage, Li had a record 2Q21, delivering 17,575 new vehicles. The core of Li's business model is its cost-effective SUV. The Li One is an Extended Range Electric Vehicle, which is cheaper to produce because it requires a smaller battery pack. The company has a growing network of retail and service centers throughout China.