Electric vehicles (EVs) are among the hottest topics in the world, and EV stocks are just as hot. Investors everywhere have been getting their hands on the top players to get a piece of the massive impact EVs will have on greener transportation for all.
These three stocks will play a massive part in this transition as they each hold a unique position within the EV market with different product offerings. However, each piece of the puzzle is necessary for the future of green transportation, and the most recent developments of these stocks hold much promise.
Let’s detail these stocks’ financial performances and newest product offerings that make them top picks for investors to acquire as soon as possible.
ChargePoint (CHPT)
Source: YuniqueB / Shutterstock.com
ChargePoint (NYSE:CHPT) has the largest network of charging stations in Europe and America. An effective and accessible charging network is a quintessential piece of the mainstream transformation of EVs. ChargePoint is at the forefront of this crucial market, and with its continued growth, it consistently lays new ground for the EV revolution.
In its most recent quarter, gross margin and revenue dropped slightly year-over-year (YOY). But exciting insights lie within ChargePoint’s progress. Subscription revenue increased by 27% from the previous quarter and a sharp drop in operating expenses of 18%.
And so, CHPT’s user base is growing, and they have strong customer loyalty. Now consider that these customers are comprised entirely of EV owners. It becomes very easy to assume that as EV owners increase, so will ChargePoint’s customer base and subscriptions. Coupled with lower operating costs, the company will continue to shrink its net loss.
And, ChargePoint reaffirmed in its earnings report its goal to reach positive EBITDA by the end of the 2025 fiscal year. Thus, it is undoubtedly on track to do so.
Rivian Automotive (RIVN)
Source: Tada Images / Shutterstock.com
While Tesla is considered the top dog in EV producers, Rivian (NASDAQ:RIVN) is not far behind. The EV maker focuses on lower-carbon emissions and a greener transportation option for all.
Rivian Automotive most prominently enforces this ideal through its attempts to offer EVs at much more affordable prices than other makers. The company’s most recent unveiling of its R2, R3 and R3X models lays the groundwork for EVs to be available to the everyday consumer. This ensures further popularity and spread, contributing to a greener earth.
The biggest challenge Rivian is facing is its ability to increase production capacity to an adequate level. Last year, it only produced 40,000 vehicles. And it is projected to make even fewer this year due to a delay in production at its Illinois plan.
However, the company hopes to bounce back substantially, starting with a $827M grant from the state of Illinois that will be put into production this year. Thanks to this aid and a new plant to be built in Georgia, the company’s guidance expects to cross over the profit line by Q4.
Rivian is an excellent investment in the green EV revolution. It leads the way with affordable models and a highly anticipated ramp-up in production.
ON Semiconductor (ON)
Source: Shutterstock
Just as important as the EVs themselves are the parts from which they are made. ON Semiconductor (NASDAQ:ON) has a huge market share in production and supplies one of the essential parts of EVs, silicon carbide (SiC) chips.
Yes, the company has struggled with slower EV sales throughout 2023 and the first half of this year. Yet, its growth potential, given its pivotal role in the EV market, cannot be denied. The outlook for the rest of 2024 is not ideal. But the company remains on track to have a steady growth rate in revenue and cash flow for the next few years.
Importantly, ON is subject to the cycles of chip suppliers, and its competitors are no exception. However, ON will certainly benefit as the macroeconomic environment improves and EV demand continues to trend upward. Given the headwinds affecting ON, its price is currently lower than in almost a year. Thus, now is a better time than ever to invest in this top chip manufacturer.
On the date of publication, Joel Lim 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.
