In the last six months, Lucid Group (LCID -5.14%) has jumped 81% while the S&P 500 has risen just 6.2%. Not all electric vehicle (EV) stocks have been so fortunate, with many selling off over the last few months.
Despite some weakness in EVs today, the market is growing and leaders are emerging. And three Fool.com contributors think General Motors (GM -1.48%), Nio (NIO -4.20%), and Ford Motor Company (F -1.29%) are better investments today than even Lucid.
Detroit's EV play
Travis Hoium (General Motors): Most of the companies thought to be EV stocks are effectively start-ups today. But it's extremely difficult to go from start-up to scale in the auto business, so I think a great investing strategy would be betting on an established company making the EV transition. General Motors fits that description.
By 2025, GM will launch 30 models of EVs and by 2035 it will only make electric vehicles, based on today's plans. That's a quick shift for the company and effectively means that most of its development work today is in EVs. Given the company's scale, I wouldn't bet against this vision.
Where I think GM has a leg up on the competition is in autonomous driving because it's the majority owner of Cruise. Not only is Cruise building the autonomous driving technology that will power its fleet of self-driving rideshare vehicles, it's designing a custom vehicle for that application called the Cruise Origin. Who is manufacturing that vehicle and financing the fleet? General Motors.
Whether the future of transportation is electric vehicles in garages or a fleet of autonomous vehicles driving around, GM is well positioned to be a market leader. That's why this is the best EV stock today.
Catalysts coming in 2022
Howard Smith (Nio): Lucid may be one of the most talked-about EV makers right now, but Chinese rival Nio is much more established and closer to profitability. While Nio stock also isn't cheap by traditional metrics, it is valued with a market capitalization about 35% lower than Lucid. And Nio has several new catalysts coming in 2022.
Nio and its manufacturing partner have been working to double production capacity. That work will be completed by the middle of this year and the company will be able to put out more than 240,000 EVs per year. Some of that added capacity will be destined for export out of China. After establishing its business in Norway in 2021, Nio expects to expand into Germany, the Netherlands, Sweden, and Denmark in 2022.
It will also begin confirming reservations for its new flagship ET7 luxury electric sedan this month for deliveries beginning in late March. That will be followed up with the midsize ET5 smart sedan, which the company expects to begin shipping in September. Investors will be watching the bottom line this year, too, with the company's first profits potentially on the horizon. That's a big head start versus Lucid to go with a cheaper valuation for investors.
Ford is arguably the best all-around EV play out there
Daniel Foelber (Lucid and Ford): 2021's best automaker stocks were Lucid and Ford. Both companies have every reason to repeat their strong performances in 2022 and beyond.
Investors who feel they missed out on Lucid can take solace knowing that the company has time to grow into its current valuation and even eclipse it in the coming years. Lucid has enough cash to easily fund its 2022 operations and should have plenty of dry powder for 2023 thanks to its recent $1.75 billion senior convertible note offering.
However, Lucid only has 17,000 reservations as of its third-quarter 2021 earnings announcement and plans to produce and deliver just 20,000 vehicles in 2022. Contrast those goals with Ford, and it is night and day.
Ford is accelerating its F-150 Lightning production capacity to 150,000 trucks per year after reservations topped 200,000 in December. It also sold over 27,000 Mustang Mach-E electric SUVs in 2021. Due to the high demand for both vehicles, Ford expects its annual battery EV capacity to reach 600,000 in just two years. Ford has a market cap of $97.3 billion compared to Lucid's $74.9 billion. Ford has a larger workforce and, unlike Lucid, decades of mass production experience -- making it a safer all around EV bet than Lucid. However, both stocks deserve a place in a diversified EV basket.
Lots of EV plays today
Almost every automaker is taking EVs very seriously today and that gives investors a lot of options in playing the industry. There are upstarts and established automakers transitioning to electric. Depending on your risk tolerance and belief in any given company, there's something for everyone.