President Joe Biden’s $2 trillion infrastructure spending plan has plenty of goodies for the electric vehicle industry. If you’re looking for the best EV stocks to invest in now, you might want to check the latest Credit Suisse EV stock picks list.
Biden has made climate change a priority. He put it at the center of the efforts to rebuild the U.S. economy following the COVID-19 pandemic. His economic revival plan includes a budget to boost EV sales. Credit Suisse has identified a few companies that are best-placed to benefit from Biden’s spending plan.
What you need to know about Credit Suisse’s EV stock picks
Electric vehicle sales are expected to keep rising. Governments lending support with subsidies and favorable regulations, falling car prices, and more accessible and fast charging are some of the factors driving the sales. For investors looking to play the EV trend, here's the latest list of Credit Suisse’s EV stock picks:
- Texas Instruments (TXN)
- Lear Corporation (LEA)
- Cummins (CMI)
Texas Instruments makes battery management systems used in electric cars. Lear Corporation makes charging systems for electric vehicles. Cummins makes battery and fuel cells, which can be used for powering electric vehicles. These Credit Suisse EV stock picks carry an outperform rating, which means they’re expected to deliver better returns than the S&P 500.
Credit Suisse's EV stock picks are beating the market.
Credit Suisse's EV stock picks are already ahead of the market with YTD returns of 17 percent, 16 percent, and 13 percent for TXN, CMI, and LEA, respectively. In contrast, the S&P 500 has returned 9.8 percent during the same period. The blue-chip index Dow Jones has returned 10.2 percent during this period.
Best EV stocks to invest in now
The latest Credit Suisse EV stock picks list focuses on components suppliers. If you’re looking to invest in companies that actually make the vehicles, the best EV stocks to consider now are:
- Tesla (TSLA)
- NIO (NIO)
- Xpeng (XPEV)
- Li Auto (LI)
Tesla is the best-known EV stock thanks in part to CEO Elon Musk. Despite the global chip shortage that's hurting auto production, Tesla posted surprisingly strong delivery numbers in the latest quarter. The company delivered 185,000 cars in the first quarter of 2021 compared to the expectations for 160,000–170,000 car deliveries. At about $732 per share, TSLA stock has gained more than 415 percent in the past year. Currently, it trades at almost a 20 percent discount to its recent peak.
NIO delivered 20,060 cars in the first quarter, which was above its target of 19,500 cars. At $37 apiece, NIO stock is down 24 percent YTD and has retreated 45 percent from its recent high.
Xpeng’s deliveries rose almost 500 percent YoY to 13,340 cars in the first quarter. At $33 per share currently, XPEV stock is down 23 percent YTD and 55 percent off its recent peak. Recently, Xpeng unveiled its latest car model the P5 sedan, which has self-driving capabilities. P5 uses lidar technology that Musk said isn’t suitable for cars.
Li Auto shipped 12,579 cars in the first quarter—a rise of 334 percent YoY. The company has only introduced a single car on the market but more models are expected. Li Auto stock trades for about $21 per share now and trades at a 56 percent discount to its latest peak.
The other EV stocks worth considering are Proterra ArcLight (ACTC), Lucid Motors (CCIV), and Electric Last Mile (FIII).
The best EV stock forecasts
Usually, EV stocks have a rosy outlook amid the efforts to reduce carbon emissions in the transport sector as part of the fight against climate change. Tesla’s high target price of $1,200 implies more than a 60 percent upside from the current level. The average target prices of Xpeng, NIO, and Li Auto imply an upside potential of 54 percent, 70 percent, and 90 percent, respectively.