The 2024 U.S. presidential election and three rate cuts will keep the electric vehicle (EV) market in the spotlight this year. Both developments might benefit the sector, so it’s important to keep an eye on these top EV stocks to watch.
Around 17 million electric cars are expected to be sold worldwide in 2024; China will lead with 45% of auto sales. What’s more, EVs are also expected to make up one in nine cars sold in the U.S. and one in four cars sold in Europe; in Q1 2024 Americans alone purchased 268,909 new electric vehicles.
As a further matter, policies such as the Inflation Reduction Act and the Bipartisan Infrastructure Law will keep powering the sector, expected to grow by 9.82% between 2024 and 2028, reaching $906.7 billion in 2028. Expect both parties to provide further policy recommendations as the 2024 election approaches.
With secular tailwinds powering the sector, the first pick among these quality EV stocks to watch is the first profitable EV startup from China. Next up is a company with backing from Amazon (NASDAQ:AMZN) looking to produce 57,000 cars this year. Lastly, we’ll discuss an iconic American automaker aiming to make 2 million EVs by 2026.
Li Auto (LI)
Li Auto (NASDAQ:LI), known as China’s first profitable EV maker, shipped 28,984 cars in March, 39% more than the year-ago period, complimenting the launch of its first totally electric model, the Li MEGA, in a Spring 2024 launch event.
This electric MPV debuted in China with much enthusiasm. The MEGA, built on an 800-volt battery-electric platform, costs $77,782 and has multiple engines, a big battery pack for speedy charging and luxury interior choices, including reclining seats and a back entertainment system.
What’s more, Li Auto also plans to spend almost $1 billion to build more than 5,000 high-speed EV charge points across China, the country accounts for roughly 60% of EV sales globally.
Investors will also be excited about Li Auto’s partnership with Nvidia (NASDAQ:NVDA), which aims to improve technologies for self-driving cars; this market could potentially be worth $62 billion by 2026.
Finally, Li Auto is slashing the prices of all of its models except for the newly released Li L6, heating up the competition in China, especially for Tesla (NASDAQ:TSLA); no surprise analysts rate the stock a “Strong Buy,” with an 83% upside.
The Li L7, L8, L9 and the Li Mega MPV all have their prices cut between 18,000 and 30,000 yuan. The Li Mega type has the biggest price drop.
Rivian Automotive (RIVN)
Much like Li Auto, Rivian (NASDAQ:RIVN) is coming off a great Q1 2024, producing 13,980 vehicles and delivering 13,588 of them. As a result of these numbers, Rivian reiterated plans to make 57,000 cars this year.
The 57,000-car target is doable, considering the company celebrated the production of its 100,000th electric car in April, thanks to the addition of 623,000 square feet to its main factory site in Normal, Illinois.
Furthermore, Rivian’s smaller and less expensive R2 and R3X models will attract customers looking for competitive prices, as affordability remains the biggest concern in greater EV adoption.
Despite these accomplishments, Rivian’s stock is down 48% in 2024 owing to losing money on each vehicle in the previous several quarters. By 2024, it intends to improve cost management and production efficiency. Rivian’s finances are still robust, with $7.86 billion in cash to fund its present and future expansion, but $16.8 billion in losses within three years makes investors wary.
Still, Rivian is doing all it can to allay these fears; pausing work on a new $5 billion factory in Georgia to save over $2.25 billion. When fully operational, the factory, built on a 2,000-acre plot of land east of Atlanta, could help make up to 400,000 cars each year.
Ford (F)
In the first quarter of 2024, Ford (NYSE:F) sold 20,233 EVs, up 86%, thanks to healthy sales growth for the F-150 Lightning and Mustang Mach-E.
Despite the division’s deficit, Ford is aiming to produce 2 million EVs by 2026 by reducing capital expenses and shifting funds to this area. On top of this, Ford to establish a low-cost EV platform to make cheaper vehicles with larger profits.
Ford wants to produce 600,000 electrified vehicles by 2024, therefore its North American assembly sites are being upgraded, including Oakville in Ontario. By 2026, Ford plans to export automobiles from BlueOval City, its advanced automotive manufacturing hub in Tennessee.
Moreover, Ford’s brand-new three-row electric cars, expected to launch in 2027, will help take advantage of new battery technologies.
Overall, Ford’s sales, earnings and cash flow all went up in the first quarter of 2024. Even though the economy is volatile due to sticky inflation and waning EV demand, the Ford Blue, Ford Model e and Ford Pro divisions will keep its finances stable and help it grow; a 20% upside and “Moderate Buy” rating accentuates Ford’s robustness.
On the date of publication, Faizan Farooque 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.