Demand for electric vehicles is only accelerating.
Governments all over the world are moving toward electric vehicles. President Biden for example, “recently laid out plans to spend nearly $200 billion over eight years to support the surging EV industry. The administration is rumored to be eyeing an expansion of the tax incentive to consumers, which could be a big tailwind to sales at Tesla and its rivals,” says Wedbush analyst Dan Ives, as quoted by Yahoo Finance.
Many want far more electric vehicles on the road.
In fact, here in the U.S., California, Gov. Newsom signed an executive order that will ban the sale of gas-powered passenger cars in the state starting in 2035. We’re even moving towards a greener future with solar and wind. In addition, analysts tell us that by 2030, the world will see 125 million EVs on the road, as noted by CNBC.
General Motors wants to phase out sales of internal combustion engines by 2035.
“The auto industry is shifting from internal combustion technology to emissions-free battery and hydrogen powertrains. Several traditional brands have also committed to a complete transition, with Bentley recently laying out a target date of 2030 to switch entirely to battery-electric vehicles, or BEVs. Nissan this week said it will electrify all models by the ‘early 2030s,’ but that will include gas-electric hybrids as well as BEVs,” as noted by NBC News.
In short, investors may want to use any weakness in EV stocks as a reason to buy.
Look at Tesla (TSLA) for example.
Dan Ives just upgraded the stock to an outperform rating with a price target of $1,000. Helping, Tesla delivered 184,000 new cars in the first quarter of the year. That’s up 100% year over year, and comes in ahead of estimates for 177,000 vehicles.
“With a green tidal wave kicked off by Biden last week in the US, and global EV demand skyrocketing going after a $5 trillion (total addressable market) over the next decade, we believe these delivery numbers are a paradigm and sentiment shifter for the space going forward,” added Ives, as quoted by The Street.
Or, look at Nio Inc. (NIO).
The company just delivered 7,257 vehicles in March 2021, a new monthly record representing a strong 373% year-over-year growth. In addition, NIO delivered 20,060 vehicles in the first quarter of 2021, a new quarterly record representing an increase of 423% year-over-year.
Even Li Auto (LI) had impressive numbers. According to the company, it delivered 4,900 Li ONEs in March 2021, representing a 238.6 % year-over-year increase. This brought deliveries for the first quarter of 2021 to 12,579, up 334.4 % year over year.
Again, investors may want to use any weakness as a reason to buy EV stocks.