2021 was a massive year for electric vehicle (EV) stocks. As global sales of EVs exploded, legacy automakers announced plans to pump billions of dollars into the industry that gave their stock prices a much-needed lift. In between, several start-ups tapped the stock markets to raise funds on the back of promising EV technology claims. Bumper stock listings lifted the entire industry's mood, and nearly every investor suddenly wanted a piece of the EV action.
Yet there are some who think they may have missed the bus, but that's far from the truth. Electric vehicles currently account for only a fraction of total global vehicle sales, and most research firms expect the industry to grow at compound annual rates in the high 20s through 2030. In other words, the EV industry is only getting started, and some stocks look ripe for an unstoppable bull run. Here are three top EV stocks that could soar.
It's a crucial year ahead for the hottest EV stock
Lucid Group (LCID 3.42%) was one of the hottest EV stocks of 2021, as it made a solid debut on the U.S. stock exchange and rocketed 280% by the end of the year. That jaw-dropping rally in a matter of months has made many wary of Lucid stock's sky-high valuation, but growth stocks typically command a premium, and Lucid could turn out to be big winner if it can ace the EV game as it believes. So far, Lucid has managed to attract a lot of attention from EV enthusiasts after its first car, the Lucid Air Dream Edition, was officially given an industry-beating range-rating of 520 miles and Lucid Air bagged the Motor Trend 2022 Car of the Year crown.
A couple of concerns, though, have weighed on Lucid stock in recent weeks. First, the EV maker hasn't revealed anything about the number of Air Dream cars it has delivered so far since handing over the first batch on Oct. 30. That has made investors in Lucid impatient even as concerns about the implications of a subpoena issued by the Securities and Exchange Commission (SEC) continue to linger.
Yet Lucid's EV technology has looked hugely promising so far, and there's no denying that Lucid is among the few EV startups that has shown the potential to become a serious threat to industry leader Tesla (TSLA 4.72%).
There are plenty of catalysts on the horizon that could kick off Lucid stock's next bull run. Key ones include timely launches of the three models lined up for 2022, hitting its production target of 20,000 units this year, and entry into international markets as planned. And, if Lucid can come out clean or almost unscathed from the SEC probe, its stock could skyrocket.
Demand for a much-awaited electric pickup is skyrocketing
Unlike other legacy automakers, Ford (F 6.24%) was quick to jump the EV bandwagon and is already reaping the benefits in the form of unprecedented demand for its electric SUV Mustang Mach-E and F-150 Lightning pickup trucks. To put some numbers to that, consider that Ford sold a record number of EVs in 2021 including 27,140 Mustang Mach-E units, second only to Tesla's Model Y. In fact, demand is so strong that Ford is now tripling production capacity for Mustang Mach-E to more than 200,000 units by 2023.
As for F-150 Lightning pickup, Ford has already secured 200,000 preorders and now plans to double production to 150,000 units a year. Ford started confirming orders for F-150 Lightning this month, so first deliveries could be just weeks away. Ford should also start deliveries of its third EV, the all-electric van E-Transit, this year.
In short, you're talking about a mature automaker here that's busy scaling capacity to meet demand for an all-electric version of what's been America's best-selling pickup truck for over four decades. And while Ford's at it, sales for its traditional vehicles continue to outrun every other auto maker in the United States. With the much-anticipated Ford F-150 Lightning electric pickup all set to hit the roads this year, I wouldn't be surprised to see greater investor interest in Ford stock going forward which could fuel the next leg of its rally.
Hard to ignore the growth potential here
Nio (NIO 2.12%) was another EV stock that received a lot of attention in 2021, but tighter scrutiny on foreign stocks stifled the stock's rise. While it's true that Nio, alongside other foreign and particularly Chinese stocks, faces the risk of delisting from the U.S. stock markets, the EV maker has a lot going for it that could hugely work in investors' favor in the near future.
To begin, Nio could seek a secondary listing in Hong Kong. In fact, Nio reportedly applied for a listing as early as March 2021, and rival EV makers in China like XPeng and Li Auto are already listed in Hong Kong.
While a secondary listing could take care of much of the concerns around Nio's potential delisting from the U.S., the company is currently focused where it matters -- getting more of its electric vehicles out on the roads. Nio should have confirmed orders for its flagship sedan ET7 on Jan. 20, and is expected to start production in early March. Later in the year, Nio is expected to start deliveries of its much-awaited mid-size sedan ET5 that it launched at its annual day event in December.
Meanwhile, reports from international publications are dropping subtle hints about Nio's expansion plans. For example, a German trade publication just reported Nio as having hired a Volvo Car executive to spearhead its entry into Germany. In another important development, Nio is reportedly clocking higher average sales price than leading luxury car makers across the three models it currently sells. In other words, Nio's cars are finding more takers in its home country.
In short, Nio, which is often called the "Tesla of China," seems to be headed in the right direction, and if even one of its several growth catalysts clicks, it could only be a matter of time before Nio stock embarks on a bull run.