Electric cars have become so commonplace that it's hard to still view them as a technology that's only still getting its bearings. For much of their existence they've needed government assistance through tax credits to drum up demand from car buyers, and in some instances that's still the case with the federal government still handing out up to $7,500 in credits for purchases.
Yet electric cars are also increasingly viewed as a viable option on their own merits, and with automakers like General Motors promising to do away with all of its gas-powered vehicles by 2035, they will become the first option of choice for many in the market.
That means they should also become a top choice for investors who are looking for long-term stocks to buy and hold over the long term. The following four stocks are a good place to start.
Image source: Tesla.
Tesla
Any discussion of EV stocks can start and stop with Tesla (TSLA +3.93%). As the premier EV maker on the market today, Tesla is a solid choice for investors. It makes more EVs than any other manufacturer, delivering almost 1 million vehicles last year, and has a goal of selling 20 million EVs a year by 2030.
That may be a stretch, as the entire automotive industry sells between 65 million and 75 million annually, but it's clear CEO Elon Musk sees a very bright future for EVs, especially those branded Tesla. Investors should, too.
Tesla has achieved consistent profitability for 10 consecutive quarters, something other EV makers can't say, and as it expands globally, its sales should expand as well. Its Gigafactory in Shanghai is ramping production, while a new Berlin facility will help supply Europe with new Teslas.
The stock is not cheap by conventional metrics, but its leading position in the industry warrants a premium, one that its business can expand into as its capacity and capabilities grow.
NASDAQ: TSLA
Key Data Points
Rivian
If Tesla is the mature EV on the market, then Rivian (RIVN +0.28%) is one of the upstarts. It went public just three months ago, and though its debut was less than stellar -- the stock is off 60% from its highs and down 36% so far this year -- it remains an EV stock for the long haul.
Where Tesla focuses on sedans and crossover SUVs, Rivian is targeting pickup trucks, SUVs, and commercial vans, all significant profit centers for old-line vehicle manufacturers. In short, Rivian is following the money, and that should spell years of growth for the EV maker.
Production of its R1T pickup began late last year, and while it fell just short of its 1,200 target delivery number (it produced 1,015), it is now quadrupling production to 200 vehicles a week from just 50 beforehand.
It needs to ramp production, too, because it intends to deliver 10,000 delivery vans to Amazon this year as part of an order for some 100,000 over the life of the contract. By prioritizing growth over profits at the outset, Rivian is hoping to achieve critical mass that, like Tesla, will eventually pay off in profitability.
Image source: Ford.
Ford
Ford (F +1.15%) is also pushing forward in EV production. While not going as far as GM in getting rid of all its gas-powered vehicles, it will invest $30 billion in its electrified fleet by 2025, with its Ford+ initiative expecting that 40% of its entire fleet will be all-electric in 2030.
That seems like a much more reasonable proposition than eliminating all internal combustion engine vehicles, as many people still don't want electric cars.
It already has the second-best-selling electric car on the market in its Mustang Mach-E, selling over 27,000 vehicles last year. The cars are so popular that they only spend 14 days on dealer lots on average.
This year is off to a roaring start, too, with Ford reporting that EV sales grew almost four times faster than the entire electric industry. It's already sold over 13,100 EVs this year, up 169% from 2021, and it has two new EVs coming out: The F-150 Lightning and the Transit Pro commercial van.
This old-line automaker knows how to compete for today's car buyer, and it's a stock pick for the set-and-forget portion of your portfolio.
Image source: Getty Images.
QuantumScape
With QuantumScape (QS +2.86%), I'm going out on a limb a bit because this start-up is still in the pre-sales period of its lifecycle and its technology, while promising, has not been completely proven. Yet because of the transparency with which this EV battery maker is sharing its progress with the public, if it does hit it could revolutionize the industry.
QuantumScape is developing a new type of lithium battery that can recharge to 80% capacity in under 15 minutes. That has not been possible with the technology that's currently on the market, but QuantumScape's design looks increasingly like it will be able to meet or even exceed those goals.
It's backed by Volkswagen, which gave it a $100 million investment and entered into a joint venture with the EV battery maker after certain milestones were hit. Commercial production of its batteries is not expected until 2024 or 2025, so there's a long ramp ahead for this stock, which has been beaten down by the market.
QuantumScape is an admittedly risky bet, but for a very small portion of your long-term holdings, it may be one that offers the greatest returns.
