Electric vehicle (EV) sales have skyrocketed over the past two years amid rising oil prices, growing climate change concerns, and federal tax incentives. Due to the current macro headwinds, oil prices are expected to remain volatile, further motivating consumers’ switch to EVs. EV sales in the U.S. are projected to reach 670,000 in 2022, representing a 37% increase year-over-year. Governments worldwide are encouraging the EV market to meet sustainability goals and achieve policy targets for decarbonization. Furthermore, governments have increased their expenditure on developing charging infrastructure, purchasing subsidies, and other incentives.
The U.S. government is promoting the adoption of electric vehicles by offering up to $7,500 in tax credits for customers purchasing an electric plug-in vehicle. Under the new National Electric Vehicle Infrastructure (NEVI) Formula Program established by President Biden’s bipartisan infrastructure bill passed last fall, nearly $5 billion will be made available to construct an electric vehicle charging network. These initiatives are driving the growth of the electric vehicle industry. Investors’ bullish sentiment surrounding the industry is evident in the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 8.2% gains over the past month.
Given the industry’s promising growth prospects, Wall Street analysts expect fundamentally solid EV stocks NIO Inc. (NIO), Fisker Inc. (FSR), Arrival (ARVL), and Canoo Inc. (GOEV) to gain momentum in the coming months.
Click here to checkout our Electric Vehicle Industry Report for 2022
NIO Inc. (NIO)
Headquartered in Shanghai, China, NIO designs, develops, manufactures, markets, and sells smart electric vehicles in China. The company offers electric SUVs and smart electric sedans. It also provides power solutions, including Power Home, Power Swap, Power Charger, and Power Map. NIO also provides repair, maintenance, bodywork services, courtesy car services, and auto financing services.
Last December, NIO held NIO Day 2021 in Suzhou and launched its ET5, a mid-size smart electric sedan. This premium electric sedan has a 0.24 drag coefficient and a high-efficiency electric powertrain, and it accelerates from 0 to 100 km/h in 4.3 seconds. The sedan is engineered to the safety standards of the five-star Chinese and European New Car Assessment Program. The launch is expected to boost the company’s vehicle sales.
NIO's vehicle sales increased 49.3% year-over-year to RMB9.22 billion ($1.45 billion) in its fiscal year 2021 fourth quarter, ended Dec.31, 2021. The company’s total revenues improved 49.1% year-over-year to RMB9.90 billion ($1.56 billion). Its gross profit increased 48.8% from the year-ago value to RMB1.70 billion ($267.06 million).
Analysts expect NIO's revenue for its fiscal year 2022 first quarter, ended March 31, 2022, to come in at $1.55 billion, representing a 25.8% rise year-over-year. The Street expects the company's EPS for the to-be-reported quarter to increase 66% year-over-year.
NIO gained 11.4% in price over the past month and closed yesterday's trading session at $22.47.
Among the 19 Wall Street analysts that rated NIO, 17 rated it Buy, while two rated it Hold. The $44.06, 12-month median price target indicates a 96.1% potential upside. The price targets range from a low of $28.30 to a high of $87.00.
Fisker Inc. (FSR)
FSR develops, manufactures, markets, leases, and sells electric vehicles. The Manhattan Beach, Calif., company operates through three segments: The White Space; The Value; and The Conservative Premium. FSR is also involved in the asset-light automotive business. In addition, the company provides Fisker flexible platform-agnostic design for electric vehicles in specific segment sizes.
This month, FSR exceeded 40,000 initial reservations for the Fisker Ocean SUV. The Fisker Ocean One launch edition is priced at $68,999 in the US. The exclusive, launch-edition Fisker Ocean One is the luxury edition, fully loaded with premium features that include 22” F3 SlipStream wheels made from aluminum with recycled carbon fiber inserts, MaliBlu interior, and a digital signature. This reflects the company’s business growth and strong sales.
On February 15, FSR began accepting reservations for its revolutionary Fisker PEAR. The starting price for the five-passenger, all-electric vehicle is $29,900 in the U.S. before taxes and incentives. The all-electric Fisker PEAR blends technology, sustainability, and design into a digitally connected and compact five-passenger urban EV. This is expected to boost FSR’s revenue streams.
In its fiscal year 2021, ended Dec.31, 2021, FSR's cash and cash equivalents increased 21.3% year-over-year to $1.20 billion. The company’s total current assets improved 23.2% from the prior year to $1.23 billion.
Analysts expect FSR's EPS for its fiscal year 2022 first quarter, ended March 31, 2022, to grow 32.3% year-over-year.
Shares of FSR have gained 21.4% in price over the past month. They closed yesterday's trading session at $13.91.
Among the seven Wall Street analysts that rated FSR, five rated it Buy, while two rated it Hold. The 12-month median price target of $22.67 indicates a 63% potential upside. The price targets range from a low of $16.00 to a high of $30.00.
Arrival (ARVL)
Headquartered in Howald, Luxembourg, ARVL designs, assembles, distributes, and sells commercial electric vehicles (EVs) worldwide. The company’s portfolio of EVs includes commercial EV vans, cars, and buses. ARVL is working towards the transition to EVs globally by creating zero-emission, sustainable, and equitable products.
Last December, ARVL revealed its first finished prototype of the Arrival Car. The Arrival Car is designed in partnership with Uber Technologies, Inc. (UBER) to create the best possible experience for ride-hailing and bring clean air to urban environments where most ride-hailing mileage occurs. It prioritizes cost, uptime, driver comfort, and safety. This development is expected to boost the company’s revenues.
In November, ARVL collaborated with Li-Cycle Holdings Corp. (LICY), an industry leader in lithium-ion battery resource and recycler in North America, to replace all vehicles with affordable electric solutions produced by local microfactories. With this partnership, ARVL might increase its profitability and drive sustainability in the EV industry.
In its fiscal year 2021 ended Dec.31, 2021, ARVL's cash and cash equivalents amounted to $905 million.
The stock has improved 7.5% in price over the past month and closed yesterday's trading session at $3.86.
Among the three Wall Street analysts that rated ARVL, two rated it Buy, while one rated it Hold. The 12-month median price target of $7.17 indicates an 85.8% potential upside. The price targets range from a low of $3.50 to a high of $12.00.
Canoo Inc. (GOEV)
Mobility technology company GOEV designs, develops, manufactures, and distributes electric vehicles for consumer and commercial markets in the U.S. It offers lifestyle vehicles, multi-purpose delivery vehicles, and pick-ups. The Torrance, Calif., company serves small businesses, independent contractors, tradespeople, utilities, and service technicians.
In December, GOEV confirmed manufacturing for 2022 and 2023 in its U.S. facilities. GOEV and VDL Groep B.V. announced that they would explore opportunities to partner together. “We concluded that VDL Groep and the van der Leegte family are the people we want to explore a continuing partnership with as we evaluate the best way and timing to expand Canoo into Europe with less risk and take advantage of advanced manufacturing technologies,” said Tony Aquila, Investor, Chairman & CEO at GOEV.
Last November, GOEV expanded its Oklahoma partnership to include new R&D, software development, customer support, and financing centers. The investments might create 700 additional high-paying jobs in the state. This development is expected to allow the company to expand its operations in Oklahoma.
GOEV's cash and cash equivalents amounted to $224.70 million in its fiscal year 2021, ended Dec. 31, 2021. Its total assets amounted to $523.07 million as of Dec. 31, 2021. Its net other income improved 700% year-over-year to $64,000 for its fiscal 2021 fourth quarter.
GOEV stock declined marginally over the past month and closed yesterday's trading session at $5.80.
Among the three Wall Street analysts that rated GOEV, two rated it Buy, while one rated it Sell. The 12-month median price target of $14.00 indicates a 141.4% potential upside. The price targets range from a low of $6.00 to a high of $21.00.
Click here to checkout our Electric Vehicle Industry Report for 2022
NIO shares were trading at $21.12 per share on Wednesday afternoon, down $1.35 (-6.01%). Year-to-date, NIO has declined -33.33%, versus a -6.03% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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