Oil prices are on the rise and with it, prices at the gas pump are rising too. There’s not much consumers may be able to do about that this year. But it’s a reminder of the key benefit to electric vehicle (EV) ownership. That makes it a good time to look at the top EV stocks for August.
There’s no question that governments across the world are pushing the electrification of the automobile industry. Numerous incentives and policies are boosting the production of electric vehicles as quickly as possible.
But the good news for investors is that this is still a sector that’s in the early stages of growth. A big reason for that is that the infrastructure around EVs is still being built. As it does, consumer confidence should increase as range anxiety decreases.
If you’re interested in this sector, here are three of the top EV stocks for August.
Tesla (NASDAQ:TSLA) must be included among the top EV stocks for August. And it’s not because the company is the clear leader in this sector. It’s also not because the company continues to beat estimates for models produced and delivered.
It comes down to the chart. TSLA stock is up 102% in 2023. However, it’s down 9% in the month ending August 9, 2023.
The biggest reason for the stock’s slump is declining margins. Tesla took an aggressive strategy to lower prices, and it’s paying off – but at the expense of the company’s margins. CEO Elon Musk is content to make that tradeoff as he continues to expand his market share lead in the sector. And don’t overlook the fact that declining profit margins should remind investors that Tesla is turning a profit.
Having said that, it’s fair to say that TSLA stock may have further to fall if the recent market sell-off gains steam. But it’s also fair to say that if you can buy this dip, you can certainly buy a larger one. Tesla is still a solid long-term buy.
Ford Motor (F)
When analyzing the top EV stocks for August, investors should look to keep it on the fairway. There may be some explosive options for traders. But if you’re investing for the long term, Ford Motor (NYSE:F) has a margin of safety that is appealing.
For starters, Ford is ranked number two behind Tesla in terms of EV sales. In its most recent quarter, Ford reported a 39% increase in revenue from its first-generation EVs.
It’s true, the company has backed off from its initial production target, which is a nod to the fact that EV adoption is not happening as clearly as hoped. Still, Ford is making electric vehicles. And the company projects it’s on pace to manufacture 600,000 EVs a year by the end of 2024.
Ford stock is not without concerns, particularly if inflation rises and the economic slowdown increases. However, buying Ford stock at around $12 with a forward price-to-earnings ratio that’s just over 6x makes the stock a compelling EV stock that you can scale into.
Lithium is the key to an EV’s lock. For as long as lithium-ion batteries remain the standard for electric vehicles, lithium will be in demand. And when considering lithium stocks to buy, Livent Corporation (NYSE:LTHM) is an appealing choice.
The World Economic Forum is forecasting worldwide lithium demand will rise to 3 million tonnes by 2030. And Forbes is forecasting revenue from lithium mining will grow at a compound annual growth rate (CAGR) of 6% through 2028.
Analysts expect Livent to capture a good bit of this business because it has access to low-cost production through its assets in Argentina. Plus, the company’s recent $10.6 billion all-stock merger with Allkem (OTCMKTS:OROCF) makes the combined companies the third-largest lithium producer in the world.
Livent is a profitable company that is growing both revenue and earnings on a sequential and a year-over-year basis. That growth is reflected in LTHM stock which is up more than 17% in 2023.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.