Stocks to buy

Tesla (NASDAQ:TSLA) remains among the most revered and talked-about EV stocks in the world. This electric-car maker has revolutionized transportation and pushed the boundaries of battery technology. But as Tesla’s stock price continues to be volatile, many investors wonder if they should give up on Elon Musk’s firm and look for other ways to invest in the growing electric vehicle (EV) industry.

The good news is that several other EV stocks can be just as, if not more, lucrative than Tesla. In this article, I will look at three very profitable, innovative ways to invest in the electric-vehicle market. I think investors should consider adding these three top EV stocks to their portfolios instead of Tesla right now.

NIO Nio $12.14
PSNY Polestar $5.63
BYDDF BYD Co. $31.75

Nio (NIO)

Source: Sundry Photography / Shutterstock.com

Nio (NYSE:NIO), a Chinese electric vehicle company established in 2014, has become prominent among American investors.  .

NIO’s sales in China are lower than those of Tesla in China. However, Nio is well- positioned in China’s rapidly-expanding electric vehicle market. Analysts, on average, expect Nio’s sales to surge 75% in 2023. Going forward, Nio is confident that it will increase its market share by releasing five new models in the first half of this year and selling more of its EVs in Europe.

After speaking with Nio’s management, Citigroup analyst Jeff Chung kept his “buy” rating on the shares with a target price of $23.30. According to Chung, Nio  is confident that it will double its sales in 2023 by launching five new models. The company aims to sell 80,000 to 90,000 EVs in the first half of 2023 and 150,000 to 160,000 in the second half.

NIO has a good chance of increasing its market share in China at the expense of  American companies due to the growing tension between the U.S. and China. That dynamic can boost Nio’s bottom line and NIO stock.

Polestar (PSNY)

Source: Robert Way / Shutterstock.com

The median target of the two analysts with  12-month price objectives on Polestar (NASDAQ:PSNY) is $10.50, One has a $12 target on the shares and the other has a $9 target The shares are currently trading around $5.65. 

The EV maker expects to grow its overall sales volume nearly 60% to 80,000 vehicles this year, down from its previous guidance of 124,000. But Polestar expects its newly launched, high-end Polestar 3 to boost its sales volumes this year, and the expensive EV may also lift the company’s margins in 2023.

Polestar operates in a highly-competitive market. Recently, Tesla cut its prices globally, and it may reduce its prices further in the future. For Polestar, that could result in margin pressure in the future, and worries about that issue have been weighing on PSNY stock.

That said, the company’s unique product line and its large presence in Europe should enable it to take market shares from Tesla. At the very least, PSNY is worth watching now. 

BYD Co. (BYDDF)

Source: T. Schneider / Shutterstock

BYD Co. (OTCMKTS:BYDDF), the leading global seller of battery electric and plug-in hybrid vehicles, announced on Monday that it anticipates that its 2022 net profit will be over five times greater than in the previous year.

Although BYD lags behind Tesla in global sales of fully electric vehicles by 400,000 units, the Chinese firm is looking to increase its sales quickly domestically and internationally with its new EV offerings, such as its Seal model.

Based in China, BYD,  in which Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B) has invested, preannounced Q4 profit of between 6.7 billion to 7.7 billion yuan. (Each dollar is worth 6.75 yuan). That was significantly higher than the 602 million yuan of profits that the company produced in the same quarter of the previous year.

BYD’s electric vehicles are aimed at middle-income consumers in China and are priced between 100,000 yuan and 200,000 yuan. That’s much lower than Tesla’s premium EVs, which cost more than 200,000 yuan each.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing 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 investing perspective.

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