Electric vehicle (EV) stocks have been on a phenomenal run over the past several years. Investors with considerable risk appetite have piled into these stocks in hopes of robust returns. Hence, in recent years, cheap EV stocks have been few and far between. However, the carnage in the stock market this year has cleared out most of the frothiness in EV stocks.
The consensus is that the automotive sector will likely go electric sooner than later. Government bodies worldwide have been encouraging the transition to EVs, providing sizable subsidies in the process. With such massive growth potential in the space, it’s easy to understand why EV stocks have been a hit for so long.
While there are still multiple headwinds for the industry, the recent stock market correction has created several intriguing cheap EV stock investment options you shouldn’t ignore. Three of the top are discussed below.
Nio (NIO)
Shares of Chinese EV giant Nio (NYSE:NIO) were trounced this year. In fact, the NIO stock has shed over 50% of its value and continues to test new lows. Consequently, the stock trades under 4.5 times trailing-twelve-month sales, more than 60% lower than its 5-year average. Therefore, it’s arguably the cheapest big-name EV stock out there.
The going has been tough for Nio and its peers amidst multiple macroeconomic challenges. Their supply chains have borne the brunt of the crises, which is why production numbers have been sub-par. However, Nio wrapped a record third quarter, delivering 31,607 vehicles, a 29.3% improvement from the prior-year period. The numbers are a testament to Nio’s resilience and point to a more conducive business environment. However, Nio’s bull case remains strong, backed by long-term catalysts such as its move into the European market. Hence, it’s an ideal time to pick it up at multi-year lows.
Canoo (GOEV)
Canoo (NASDAQ:GOEV) is another one of the cheap EV stocks to consider. The company specializes in producing electric pickup trucks. Like other EV SPACs, it generated plenty of hype and saw its shares trade at an all-time high of $10 per share. Since then, its stock price has fallen off a cliff, with bankruptcy concerns looming for the better part of the year. However, all that changed after it received a massive EV order from retail giant Walmart (NYSE:WMT).
In July, Walmart announced it was purchasing 4,500 last-mile delivery vans from Canoo with an option to purchase an additional 5,500 EVs. Walmart has paid Canoo $300 million in pre-payments which has significantly bolstered its dwindling cash reserves. On top of that, it also announced a $200 million at-the-market offering which frees up more cash for the company.
Naturally, GOEV stock remains a risky long-term bet; however, at current prices, it’s dirt cheap and worth betting on.
Ideanomics (IDEX)
Ideanomics (NASDAQ:IDEX) is one of the most innovative EV companies on the market. It was also one of the more popular meme stocks last year, but has since shed most of its value. Nevertheless, it remains an attractive penny stock with moon-shot potential.
It operates as electric vehicle mobility and fintech enterprise. Perhaps its most important business is its mobility segment, which provides commercial truck and bus fleets electrification services. The approach includes planning, infrastructure, operational assistance, and other related elements.
Moreover, the company is also investing in fintech, which aims to help companies stay abreast with the pace of innovation, specializing in several areas including real estate, commodities, and whatnot. Hence, the firm aims to become a one-stop shop for those looking to keep up with evolving trends in the EV space. With IDEX stock trading at under 30 cents and its massive addressable market, it’s worth investing in at current levels.
On the date of publication, Muslim 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
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