The Best EV Stocks to Buy and Watch: 5 Top Stocks for February 2023

EV shares have multiplied Tesla‘S (TSLA) wake up and want electric cars to go mainstream – but not all are created equal. Some auto stocks are more poised than others for an electric future. Here are the top rated EV makers and EV related games.

• BYD
• General Motors
• QM
• onsemi
• Aehr test systems

The best EV stocks to buy or watch

The charts for most EV stocks remain under pressure. Broadly speaking, both established automakers and startups are speculative bets on the growth of electric vehicles, which are themselves considered an emerging field. Growth stocks led the bear market in 2022 on rising inflation and interest rates.

It’s hard to find an EV stock with a good mix of fundamentals and technicals right now. Excluding Tesla, these are our recommendations based on EV sales, strategy and growth plans.

X

BYDDF share

BYD (BYDDF) deserves one EPS rating of 82 and an RS rating of 79, both out of a best possible 99. The RS rating of 77 means that BYDDF stock has outperformed 77% of all stocks in the IBD database over the past year. Stocks are traded over-the-counter in the United States

BYD stock is working on a long deep cup base with a buy point of 43.71. Stocks appear to be working on a handle above the 200-day moving average, which may be slightly too low to be a reasonable handle.

In early 2022, Chinese auto giant BYD (for Build Your Dreams) switched to producing pure electric vehicles (aka battery electric vehicles, or BEVs) and plug-in hybrid electric vehicles (PHEVs).

BYD sold more than 1.85 million electric cars, including hybrids, in 2022. In both 2022 and 2021, BYD more than tripled electric vehicle sales.

Most of BYD’s sales still take place on home turf. However, major international expansion is underway including the US, Europe and markets in Asia beyond China.

The company supplies batteries, including to Tesla, and manufactures its own chips. That has underpinned BYD’s rapid expansion in 2021 and 2022.

Including PHEVs, BYD has outperformed Tesla sales. BYD is also closing the gap to Tesla for BEVs. In the minus column, investment legend Warren Buffett continues to reduce his stake in BYDDF stock.

GM stock

General Motors (GM) has a Composite Rating from 79, EPS rating of 83 and an RS rating of 57. GM stock is well above the 50-day and 200-day moving averages on better-than-expected earnings and a strong outlook.

GM shares are just below a buy point of 41.68 after briefly jumping in last week.

Along with earnings on Jan. 31, GM CEO Mary Barra announced a $650 million investment in Vancouver, British Columbia Lithium America (LAK). Lithium is an important battery material for electric vehicles.

Traditional automakers continue to embrace electric vehicles (EVs), away from gasoline and diesel cars. By 2025, General Motors will spend $35 billion developing electric and autonomous vehicles. By then, 30 new electric vehicles are to be launched worldwide. By 2030, GM expects up to half of its global sales will be battery-powered cars.

On the downside, GM is struggling to ramp up production of new luxury electric vehicles, including the Hummer truck and Lyriq SUV, despite the older-generation Chevy Bolt EV model selling well.

Three all-new EV models from GM’s mass-market brand Chevrolet are due in 2023. These new electric vehicles include all-electric versions of the Chevrolet Silverado, Chevrolet Blazer and Chevrolet Equinox. The Chevy Silverado pickup is GM’s best-selling model. The Blazer and Equinox are popular SUVs.

QM warehouse

Sociedad Quimica y Minera (QM), also known as SQM, carries a composite rating of 90, an EPS rating of 96, and an RS rating of 65.

SQM stock has a double bottom basis with a buy point of 112.45 but is carving a handle that could lower the official entry to 98.76.

Chile’s SQM is driving global adoption of electric vehicles that use lithium batteries. Demand for lithium, a critical material for EV batteries, has outstripped supply. This has pushed lithium prices up.

SQM also produces iodine and potassium, which are used in X-rays and fertilizers, respectively.

In stock

onsemi (AT) carries a Composite Rating of 94, EPS rating of 93 and RS rating of 93. On February 1, ON stock broke out of a cup basis with a buy point of 77.38.

Shares have continued to rise and are now rolling, meaning they are not within the proper 5% buying range.

The chipmaker beat estimates for the fourth quarter on Feb. 6 but dropped to weak guidance. ON stock remains above the buy point.

Secular megatrends of electric vehicles, advanced driver assistance systems, alternative energy and industrial automation drove Onsemi’s revenue growth, CEO Hassane El-Khoury said in a press release.

At the beginning of January, Onsemi entered into a strategic partnership Volkswagen (VWAGY) to supply inverters for use in a next-generation VW electric platform.

Onsemi also offers technology for fast charging of electric vehicles.

AEHR stock

Aehr test systems (ahr) has a composite rating of 99, an EPS rating of 78, and an RS rating of 99, all out of the best possible 99.

AEHR stock has had wide swings over the past few months, usually in the upward direction.

Semiconductor equipment manufacturer Aehr offers products for testing logic, optical and memory integrated circuits as quality and reliability requirements increase. The Fremont, California-based company has grown its revenue by double and triple digits.

It advertises strong demand for equipment to test silicon carbide power chips used in electric vehicles.

Demand for silicon carbide (SiC) chips for electric vehicles will grow exponentially over the next decade.

In addition to electric vehicles, silicon carbide chips have good prospects in the markets for industrial, solar, wind and charging infrastructure for electric vehicles.

AEHR stock holds a spot on the IBD 50 List of Top Growth Stocks.

Tesla vs BYD: Which EV Giant is the Better Buy?

Are EV Stocks a Good Buy?

Companies with two traits are generally the best candidates to buy and watch stocks according to the CAN SLIM guidelines. First, they need a strong track record of earnings growth. Second, they should be technically strong and forming bullish chart patterns.

Most of the new EV startups don’t have either. These EV stocks include fisherman (FSR), canoe (GOEV), Faraday future (FFIE), lord city (DRIVE) And Xos (XOS). In fact, many of the startups are not yet producing electric vehicles.

Get alerts on stocks near buy points with the IBD leaderboard

However, Lucid engines (LCID) And Rivian Automotive (RIVN) have started selling electric vehicles.

Meanwhile, Chinese EV startups like No (NEVER), XPeng (XPEV) And Li car (LI) sell tens of thousands of vehicles, but are not yet profitable or not permanently so.

Then there are old car giants like General Motors (GM), ford (f), Volkswagen (VWAGY) and China’s BYD Co. (BYDDF), all of which morph into EV powerhouses.

EV battery inventories, EV charging inventories

The growing universe of EV stocks doesn’t end with automakers. A constellation of other companies offers car batteries, car charging stations, electric motors and other EV-related products. Below are ChargePoint (CHPT), EVgo (EVGO), Charge Blink (BLACK) And wall box (WBX).

hylion (HYLN) develops electric drives for big rig trucks. Romeo power (RMO) manufactures battery packs for commercial EV fleets. QuantumScape (QA) is aimed at solid-state lithium-metal batteries.

magna (MGA) supplies battery housing and e-drive transmission. It is also an electric vehicle contract manufacturer.

Find Aparna Narayanan on Twitter at @IBD_Aparna.

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