Some of the battered electric vehicle (EV) stocks are already regaining ground in 2023 after last year's rout. Nio (NIO 2.69%) stock plunged 69% in 2022, while Ford (F -0.33%) lost almost 44% value in the year. As of this writing, both stocks are already up around 24% each barely a month into 2023.
Although the markets overall are off to a good start this year, Nio and Ford have their own catalysts driving their shares, and there are solid reasons why both stocks could rally even higher and turn out to be among the hottest EV growth stocks of 2023.
Why Ford stock could rally in 2023
Ford's F-Series has been America's best-selling truck for 46 consecutive years now. Ford is now trying to replicate the success in the EV market with an all-electric version of the popular pickup, called the F-150 Lightning.
In fact, the F-150 Lightning pickup is off to a solid start. It has won the MotorTrend Truck of the Year award for 2023, becoming the first electric truck to win by a unanimous vote from the judges. The magazine even called the truck "no less than a milestone achievement in the history of American mobility."
Sales for the F-150 Lightning pickup are booming. Between its launch in May 2022 and the end of the year, Ford sold 15,617 F-150 Lightning pickups, and it was America's No. 1 electric truck in December. Ford's order book is so full that it is rapidly ramping up production and expects to deliver 150,000 Lightning trucks annually by the end of 2023. That's huge. Anyone following the EV market knows that manufacturing at scale is one of the biggest hurdles for EV makers. Meanwhile, Ford's Mustang Mach-E sales rose 45% in 2022, and its E-Transit van cornered 73% of America's electric van market in the year.
Image source: Ford.
Thanks to this trio of EVs, Ford became the second-largest EV manufacturer in America last year, right behind Tesla (TSLA -3.25%). That's nothing to sneeze at; even as early as a year ago, not many could have imagined a legacy automaker becoming America's second-largest EV maker.
Ford is also keeping a close tab on competition, and in its own words doesn't want to "cede ground to anyone." Ford, therefore, just slashed the prices of the Mustang Mach-E, close on the heels of price cuts from Tesla, even as it rapidly increases the car's production to reduce customer wait times.
2023 could be a big year for Ford's EV business, and at the pace at which it is selling EVs, especially the F-150 Lightning, the stock deserves greater credit for its EV potential.
Why Nio stock could explode in 2023
Nio's fortunes are tied to the Chinese economy. On the one hand, that put a lot of pressure on the EV stock over the past year or so as COVID-19 lockdowns, regulatory crackdowns on tech stocks, and the threat from U.S. regulators to delist shares of foreign companies kept investors away from Chinese stocks. On the other hand, China is the world's largest EV market and is growing rapidly, and Nio is making the most of the boom.
Right now, Nio is on the cusp of a fresh growth phase. Its deliveries hit a record in the fourth quarter and rose 34% in 2022 despite all the macroeconomic and supply headwinds. Nio's recently launched premium mid-sized sedan, ET5, is reporting strong sales, and it was already among the 10 best-selling premium sedans in China in December. By the end of March this year, Nio will start selling the ET5 in Europe, the only market outside of China that the company has tapped so far. Europe, by the way, is the world's second-largest EV market.
Nio has several new launches lined up for 2023 and expects to have eight models on sale by mid-year. These could include a model to take on archrival Tesla's Model Y. In the long run, Nio wants to target the masses and is already building an affordable mass-market brand that could be ready for deliveries within the next couple of years.
Nio's deliveries slumped 46% sequentially in January, but Nio wasn't alone as the Chinese New Year holiday hurt sales across the EV market. Nio has its growth plans in place, and its deliveries should rise steadily in 2023 as the company boosts production. Yet, Nio stock hasn't been this cheap in more than two years, and it may not be this cheap for much longer.
Two powerful EV stocks
Macroeconomic headwinds in China and the U.S. have given Nio and Ford a tough time, but both companies have navigated the storms well, with focus on cost efficiency and growth. While Nio is making waves in China's premium electric car market, Ford is absolutely crushing the EV truck market in the U.S. At the pace at which these companies are selling EVs, it'll be a mistake to ignore their stocks in 2023.
