These 3 Buy Rated EV Companies Have >300% Upside Potential

The automotive industry has seen tremendous change in recent years. Companies have started to shift to greener alternatives for power. Countries have also begun monitoring carbon footprint, energy usage, and other sustainable metrics and applied regulatory changes focusing on long-term sustainability. A growing trend in company analysis has moved investors into looking at sustainability metrics such as ESG (Environmental, Social, and Governance scores) to understand the impact of investments in society.

With these changes, awareness brings about a change in different sectors. The automotive industry is particularly one of the key sectors experiencing this technological shift, with companies focusing on EVs (electric vehicles). An electric vehicle is a vehicle that can be powered by an electric motor that draws electricity from a battery and is capable of being charged from an external source.

Research indicates that this shift into EVs will bring about significant growth in the sector and will grow up to a $1.32 Trillion Market by 2028. As the industry is still in the early stages, there is significant room for growth for these companies that investors can participate in. 

Let’s look at 3 buy-rated companies that can potentially grow up to more than 250% of their current value based on analyst estimates.

Nio Inc. (NIO)

NIO Inc is a China-based holdings company that manufactures, researches, and develops premium smart electric vehicles. Their main activities involve designing, manufacturing, and selling high-end smart electric vehicles such as ES8, ES6, EC6, and ET7. They also provide charging piles and vehicle internet connection services.

Nio is also involved in developing autonomous driving and battery swapping technologies. Their electric vehicles are equipped with NAD (NIO Autonomous Driving) technology, including their NIO Adam supercomputing platform and their NIO Aquila super sensing system.

Analyst Rating

Analysts rate Nio Inc. as a “Moderate Buy” based on 4 Strong Buys, 1 Moderate Buy, and 4 Holds. The mean target price is set at $17.61 and High Target is $31.30, an upside of 

(257%).

Should you buy now?

Nio's technicals show that it is starting to lose its downward strength by the divergence in its RSI. The stock price is starting to carve a bottom from its 2021 peak. It’s testing its recent 52-week low at $8.03. Investors started to pick up Nio yesterday with 56.19M shares traded and ended the day with a 5.93% gain. Investors should still prioritize risk management in pickup stocks for bottom picking when significant signs of recovery are not yet on the horizon.

Fisker Inc (FSR)

Fisker Inc. is a technology-driven, low-overhead business model-based company in the automotive industry, primarily focusing on designing and selling electric vehicles. The company focuses on a unique approach known as the Fisker Flexible Platform Agnostic Design (FF-PAD), allowing it to adapt its vehicle designs to fit any electric platform within specific market segments. These segments include:

• White space
• Value
• Conservative premium segments.

Fisker plans to provide third-party insurance coverage to customers for risks such as auto liability, physical damage, and general and product liability.

Analyst Ratings

Analysts rate Fisker Inc. as a “Moderate Buy” based on 3 Strong Buys 4 Holds and 1 Strong Sell. The mean target price is set to $13.61 and High Target is $28.00, an upside of 390%.

Should you buy now?

Fisker Inc. technicals are on their way to test its near-term low at $5.58. On Feb 27, 2023, the company rallied more than 30% on earnings results, but is on its way to giving it all back following recent market jitters in the financial space. At 36.06, RSI is still in bearish territory. Investors planning to buy into Fisker will want to proceed with caution and wait for signals of strong support or divergence in RSI. 

Rivian Automotive Inc. (RIVN)

Rivian Automotive is a company that creates electric vehicles and their accessories. The company sells its products directly to consumers and commercial markets. Their product line includes:

•  R1T -a two-row, five-passenger pickup truck
•  R1S -a three-row, seven-passenger sport utility vehicle (SUV).

Rivian's R1 technology includes vehicle electronic systems, batteries, electric drives, chassis, advanced driver assistance systems (ADAS), and digital user experience management. Rivian also offers vehicle accessories such as all-weather floor mats, camp kitchens, rooftop tents, and wall chargers. They also have a fleet management subscription platform called FleetOS. Rivian also collaborated with Amazon to design and engineer the Electric Delivery Van (EDV) using their RCV platform for the commercial market.

Analyst Ratings

Analysts rate Rivian Automotive Inc. as a “Moderate Buy” based on 9 Strong Buys, 3 Moderate Buys, 4 Holds, and 1 Strong Sell. The mean Target price is $30.50, and High Target is $60.00, an upside of 361%.

Should you buy now?

Rivian is currently in a bearish trend and minted another low yesterday. Investors should be defensive and wait for signs of recovery in stock prices. Its RSI reading is starting to hover in the oversold territory (currently 33.15) with no near-term bottom yet in sight. Investors willing to wait can potentially get their positions cheaper and with lower risk once signs of recovery come into fruition.

Final Thoughts

Investing in a sector with enormous potential is one way investors can grow their portfolios. As we’ve seen with Tesla, companies can become behemoths in the industry as the world transitions into a greener worldwide economy. However, even with such growth prospects, investors should still exercise caution and research companies in the industry. As the sector tends to mature, disruptors also tend to arise, and being able to identify them early on can be a gold mine in any investor portfolio.

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