Everywhere we go these days, we are introduced to revolutionary new electric vehicle (EV) products and features: electric passenger and commercial vehicles, charging stations, and driverless pizza delivery cars to name a few. It's an amazing time for development and an equally amazing opportunity for investors.
One stock name that has become synonymous with EVs is Tesla (TSLA -0.34%). But there are numerous companies carving a path as leaders in this burgeoning market, including Ford (F 0.15%), ChargePoint Holdings (CHPT 2.23%), and the Global X Autonomous & Electric Vehicles ETF (DRIV 0.23%) -- an exchange-traded fund that offers investors a bucket of holdings in companies vying for a share of this market.
Let's find out a bit more about these three companies whose stocks are trying to replicate some of the Tesla stock magic.
In August, President Joe Biden said he wants to see 40% to 50% of all new automobiles sold in the U.S. be electric by 2030. He also said that, in order to do this, it would require millions of charging stations to be added around the country. In response, a majority of top auto manufacturers, including Ford, showed support for the initiative through a joint statement affirming Biden's goal. Ford management said the automaker plans to have 40% of all vehicles it sells be electric by 2030, while General Motors has stated it expects to sell only EVs by 2035.
For over 30 years, Ford's F-150 pickup truck has been the best-selling vehicle in America. Now that No.1 pickup is getting a bit of a makeover and the response has been positive. The company already has 150,000 orders for the F-150 Lightning, an electric version of its pickup. Demand is so high that Ford has added workers to ramp up production capacity to 80,000 vehicles per year, doubling the current capacity. The pickups are expected to be available in spring 2022.
But Ford won't be alone in the electric truck market. GM, Tesla, and Lordstown Motors are launching electric trucks in 2022. Rivian recently celebrated its first customer vehicle driving off the production line on Sept. 14, well ahead of the competition. Rivian management did not mention how many will be produced or exactly when they would be available.
Fortunately for Ford, the company invested over $500 million in Rivian in 2019 and should benefit from any Rivian success, since it will increase the value of Ford's stake. That stake may become more valuable soon as well because Rivian is expected to launch an initial public offering later this year or early 2022.
So 2022 is shaping up well for Ford, and this could be just the start of a stock price run-up that mirrors the 100% increase in production capacity of its new Lightning F-150.
ChargePoint and its investors are looking forward to a strong 2022 too. As a leading operator of a fully integrated EV charging network, the company is building out charging stations around the globe while providing users with real-time management via a mobile app and 24/7 support.
The EV charging infrastructure market is projected to grow to $145 billion by 2027, for a compound annual growth rate of 33%. According to Reuters, the U.S.'s current 43,000 public EV charging stations are projected to increase to nearly 13 million by 2030.
ChargePoint operates 30,000 charging ports across 18,000 locations in the U.S and Canada. The company makes stations available for businesses and individual consumers. By comparison, EVgo owns 2,000 stations across 34 states and Blink Charging has 5,000 charging stations.
Fiscal 2022 second-quarter revenue hit $56 million, an increase of 61% year over year. The growth rate led management to raise revenue guidance for full fiscal 2022 by 15% to $225 million to $235 million. The massive expansion efforts have also increased expenses, leading to a second-quarter non-GAAP loss of $40.4 million. That's up from a $23 million loss in Q2 of fiscal 2021.
ChargePoint will need to keep expenses in check, but as it grows along with its market, the company's financials appear to be sustainable with $618 million in cash on the balance sheet. This should provide enough reserves to remain on track for its projected growth.
At roughly $20 per share, the stock offers an excellent upside opportunity. The price is down nearly 59% from its 52-week high, likely in relation to a broader tech stock selloff that began in mid-February. Raised guidance and a $34 average 12-month price target suggest that the stock has an excellent buy-low opportunity in what could be a leading EV charging company for years to come.
3. Global X Autonomous & Electric Vehicles ETF
Selecting individual stocks, especially in a rapidly growing EV market, can pose a challenge for some investors because of the many new entries and unknowns. Will the leaders of today be the leaders of tomorrow?
An alternative to picking individual EV stocks is the Global X Autonomous & Electric Vehicle ETF. Considered by some as a top electric vehicle ETF, it invests in multiple companies focusing on the EV market. Its top 20 holdings include big manufacturers like Tesla (its top holding), Ford, and General Motors, while also carrying shares in big tech such as Apple, Nvidia, and Microsoft. For investors wary of investing in this market in some way other than Tesla, this is where you get the best of both worlds.
This ETF can help spread any risk associated with investing in a single company, and gives an investor indirect ownership of shares in a number of companies big and small that could hit pay dirt at any time with a game-changing innovation.
After a per-share price spike from $15 to $26 in 2020, shares seem to have found a new base in the $26 to $29 range since the beginning of the year, making a perfect entry point for investors as we head into what is anticipated to be an exciting 2022 in the EV and autonomous vehicles market.
An excellent playground for long-term investors
We are at the start of a revolutionary wave moving across the automobile market. With growing anticipation of 2022 -- including new EVs (like trucks) rolling off production lines -- and innovative automation like driverless delivery vehicles, the investment opportunities seem exciting.
Sometime in the not too distant future, you could be charging up your EV and look at your phone to check out the growth of your portfolio thanks to these three investments.