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3 electric vehicle stocks to buy before the market starts to soar in 2023


Investors looking into the electric vehicle space certainly have a number of options to choose from. In this market, many valuations among electric vehicle players have reached more attractive levels. However, choosing the best electric vehicle stocks to buy is harder than it looks.

It’s mainly because the macro image right now isn’t great. Due to rapidly rising interest rates, growth stocks (such as those in the electric vehicle sector) have been hit very hard by Mr. Market. Indeed, the stock prices of many companies on this list are significantly below their 2020 or 2021 peak. Indeed, higher discount rates make companies with earnings in less desirable years. That’s the way things are right now.

That said, investors looking for EV stocks to buy certainly have reason to consider these growth companies. First, how much of this bad sentiment and valuation impact has already baked into a negative environment going forward? Second, the growth of the electric vehicle sector is expected to continue, with most governments fully supporting this technological transformation.

As the world becomes electrified, the use of electric vehicles is set to absolutely take off. In the United States, subsidies to support the adoption of electric vehicles have certainly helped. Via President Biden’s recent Inflation Reduction Act, a tax credit of $7,500 on new electric vehicles and $4,000 on used vehicles was extended. This could further strengthen what should be the main market for most automakers in just a few years.

Here are three EV stocks to buy for investors currently eyeing this sector for the long term.

Tesla (TSLA)

Source: helloabc / Shutterstock.com

Any electric vehicle stock list should begin with You’re here (NASDAQ:TSLA).

Indeed, US-based Tesla is one of the world’s most iconic electric vehicle brands. The company’s flamboyant CEO, Elon Musk, has been making headlines (good and bad) about his recent acquisition of Twitter (NYSE:TWTR). And while many think that might be a distraction, considering he’s the CEO of several other big companies, it’s clear he’s a man on a mission to solve complex problems.

I’ve been bearish on Tesla in the past and continue to be skeptical of the company’s valuation. That’s because there are plenty of high-quality competitors out there, who only seem to be getting more aggressive in their search for a slice of this growing pie. That said, Tesla will remain the leader in electric vehicles for at least a few years to come. Thus, many expect Tesla to attract more car buyers into the company’s ecosystem, driving even more growth over time.

There’s something to be said for first-mover advantage, and Tesla certainly has such an advantage in this high-growth industry. So, for investors looking to bet directly on this space, Tesla is the easiest option to consider right now.

Lucid (LCID)

The Lucid Motors (LCID) plant in Arizona.

Source: Around the World Photos / Shutterstock.com

An early-stage competitor to Tesla in the luxury electric vehicle space is Lucid (NASDAQ:LCID). This company certainly makes many lists of EV stock investors to buy for a variety of reasons. Indeed, in the minds of many investors, Lucid looked suspiciously like Tesla perhaps a decade ago.

It is a US-based company that designs, engineers, and builds its own vehicles from the ground up. The company’s aggressive growth plans began with production targets of 6,000 to 7,000 electric vehicles in 2022.

Thus, the company has already completed production of 2,282 electric vehicles in the third quarter of 2022. These cars came from the Lucid manufacturing plant in Arizona, with deliveries totaling almost 1,400. delivery of this start-up company will continue to be the focus of many investors.

Lucid is also an interesting company to consider for its global appeal. The company’s brand has seen strong demand from other global markets, with Lucid recently opens its first studio in Riyadh, Saudi Arabia. This luxury retail space will allow customers to experience the brand and its offerings in a luxurious way. The company has also adopted a direct-to-consumer model. This model will allow its customers to enjoy a first-rate shopping experience personalized according to their needs. This premium experience will be available for both online and offline requests.

For long-term investors looking for the “next Tesla”, Lucid is often the first option that comes to mind. Cars from this company are certainly expensive, and if we are heading into a recession, there is some risk. We’ve all seen what Tesla can accomplish, and Lucid could be about to burst.

Polestar (PSNY)

Big Polestar logo with electric car in store.  Polestar (PSNY) is a Swedish car brand owned by Volvo Cars and Geely

Source: Robert Way / Shutterstock.com

Let’s complete our list of EV stocks to buy with The North Star (NASDAQ:PSNY), let’s go?

This Swedish-based electric vehicle manufacturer is another producer of high-end electric vehicles. I am more optimistic than on the two previous options.

Indeed, Polestar is more advanced in its development than Tesla’s other high-end competitors. The company recently announced the delivery of approximately 9,215 electric vehicles in the third quarter of 2022. This is the result of an increase in production the company has seen after some pandemic restrictions were relaxed in China.

Now, geopolitical risks apply to all companies on this list. As a result, Polestar, as a global player in this space, offers a risk-reward profile that isn’t for everyone. That said, it’s also a company on track to meet its global delivery targets of 50,000 units in 2022. When it comes to premium competition, many are pointing to Polestar as the company with the potential to reduce Tesla’s impressive lead in the sector.

I’m particularly impressed with the company’s Polestar 3 electric SUV, which should be produced in the United States. While more investment is needed in the short term, it’s a compelling bet in this high-growth space over the long term.

As of the date of publication, Chris MacDonald had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

Chris MacDonald’s love of investing has led him to pursue an MBA in finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. . His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative long-term investment outlook.

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