Many electric vehicle (EV) stocks soared to their all-time highs during the buying frenzy in meme and growth stocks in 2020 and 2021. But over the following four years, many of those stocks fizzled out as rising interest rates popped their bubbly valuations, cast a harsh light on their losses, and drove investors toward more conservative investments.
But as interest rates decline and the macro environment stabilizes, it might be worth nibbling on some of those fallen stocks again. So if you have $1,000 to spare, I believe these three EV stocks deserve a speculative investment in this volatile market: Archer Aviation (ACHR +4.04%), EVgo (EVGO +6.22%), and QuantumScape (QS +6.52%).
Imaage source: Getty Images.
1. Archer Aviation
Archer Aviation produces electric vertical take-off and landing (eVTOL) aircraft, which are being promoted as cheaper, quieter, and greener alternatives to traditional helicopters for air taxi services. Its Midnight eVTOL aircraft can carry a single pilot and four passengers, and it travels up to 100 miles at 150 miles per hour on a single charge. Archer only delivered its first aircraft last August, but it aims to produce 10 aircraft in 2025, 48 aircraft in 2026, 252 aircraft in 2027, and 650 aircraft in 2028.
NYSE: ACHR
Key Data Points
That's an ambitious roadmap, but Archer is already backed by United Airlines, which placed a $1 billion order for 200 of its Midnight aircraft in 2021; the automaker Stellantis, which made several big investments in Archer and chose it as the exclusive contract manufacturer for its own eVTOL aircraft; and Soracle (a joint venture formed by Japan Airlines and Sumimoto), which placed a $500 million order for 100 of its Midnight aircraft last year. Archer has also been working with the U.S. Department of Defense (DOD) since 2021.
Archer is barely generating any revenue today, but analysts expect its annual revenue to reach $188 million in 2026. With an enterprise value of $4.3 billion, Archer seems pretty pricey at 23 times that estimate. But if it scales up its production of eVTOL aircraft over the next few decades, it could evolve into a much larger aviation company.
2. EVgo
EVgo is a leading builder of EV charging stations. Its drivers pay for each charge or a monthly fee for discounted rates. In its latest quarter (the third quarter of 2024), its number of charging stalls rose 34% year over year to 3,680, its number of customers grew 53% to 1.2 million, and its network throughput more than doubled to 78 gigawatt-hours (GWh).
NASDAQ: EVGO
Key Data Points
For the full year, EVgo expects its revenue to rise 55%-65% to $250 million-$265 million as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improves from -$59 million to - $28 million-$32 million.
EVgo is growing even as the EV market cools off and it faces stiff competition from Tesla's Superchargers and ChargePoint's more expansive (but slower) network of EV charging stations. Some of that resilience can be attributed to its longtime partner, General Motors, which tethers its EVs to its charging network.
From 2023 to 2026, analysts expect EVgo's revenue to grow at a compound annual growth rate (CAGR) of 44% as its adjusted EBITDA finally turns positive in 2025. With an enterprise value of $313 million, EVgo trades at less than 1 times its projected sales of 2025 -- so it could soar a lot higher once the EV market warms up again.
3. QuantumScape
QuantumScape develops solid-state lithium metal batteries, which are denser, offer better thermal resistance, and charge more quickly than traditional lithium-ion batteries. Its prototype QSE-5 batteries have an energy density of more than 800 (watt-hours per liter) and can be quick-charged from 10% to 80% in less than 15 minutes. By comparison, lithium-ion batteries have an energy density of 300-700 Wh/L and must be charged for 20 minutes to an hour on a Level 3 charger to reach 80%.
NASDAQ: QS
Key Data Points
QuantumScape has been co-developing its batteries with Volkswagen for over a decade, but it hasn't commercialized any of its batteries yet. However, the company could reach a major inflection point this year when it transitions from its current Raptor separator process to its more sophisticated Cobra separator process. That upgrade should boost its cell reliability and production yields, and it could help it ship out higher volumes of the QSE-5's advanced (B1) samples to select automakers.
QuantumScape aims to finally generate its first few million in revenues as it delivers its first commercial batteries in 2026. But after it scales up its business and ramps up those shipments, its revenues could soar as it disrupts the aging lithium-ion battery market. If that happens, its high enterprise value of $1.8 billion today might seem like a bargain in just a few years.
