It’s clear electric vehicles (EVs) will have a huge role to play in 21st century transportation. Demand for the low-emission cars is soaring amid growing concerns over the environment and increasing fuel costs. I think there’s a world of opportunity for me to make a stack of cash with EV stocks.
More battery-powered vehicles were sold in Britain in 2021 than in all the previous five years combined. That’s according to Society of Motor Manufacturers and Traders data released today. In total, some 452,527 battery-powered, plug-in and pure hybrid vehicles were sold in the UK, up 58.7% year-on-year. Similarly-spectacular sales figures are being recorded all over the globe.
In a rush to grab a slice of the action, Sony on Tuesday announced plans to enter the EV market. It even unveiled its Vision S SUV prototype on the stage at this week’s CES2022 show. Apple also continues to make tracks in a bid to launch its own fleet of ‘green’ cars by the middle of the decade. More EV manufacturers are set to follow Rivian’s November’s IPO amid lively investor interest too.
2 EV stocks I’d buy today
So the market is packed with potential for investors. But which EV stocks could help me make great returns over the next decade? Here are two of my favourites for 2022.
It’s hard to talk about EV stocks without mentioning market leader Tesla. It has the technology and the brand recognition to take the industry by storm. In the fourth quarter of 2021, it sold 308,600 of its cars, smashing broker forecasts for 266,000. Tesla has plans to build a suite of so-called ‘gigafactories’ in Europe and the US (and possibly Asia too) to meet soaring demand and keep those electrifying sales numbers going.
My main concern for Tesla looking ahead is competition. Not only could its market share sink as new EV makers enter the fray. Its position is under threat as existing major car makers, from Rolls-Royce and VW to Ford and Toyota, invest billions in electric technology.
#2: TI Fluid Systems
Last summer, I bought shares in TI Fluid Systems to get exposure to the EV explosion. It’s not the sexiest of stocks, but the fluid carrying-and-storing components it makes are essential in making cars move. I think it’s a great stock to buy because the parts it makes are required in much higher quantities in electric and hybrid cars than those powered by internal combustion engines.
I am concerned though, that demand for TI Fluid Systems’ product is vulnerable to broader supply chain problems hitting car production rates. Revenues at the business dropped 14.7% in the third quarter of 2021 as light production volumes slumped by almost a fifth. That said, over the long term, I’m confident this EV stock could make me a decent pot of cash.
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Royston Wild owns TI Fluid Systems. The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.