Forget NIO, Buy These 3 Electric Vehicle Stocks Instead

DiDi Global Inc.’s (DIDI) sudden decision to delist from the New York Stock Exchange (NYSE) less than six months after its listing surprised the market. The company’s decision highlights the deteriorating United States-China relationship.

Based in Shanghai, China, electric vehicle (EV) maker NIO Inc. (NIO) is known as the ‘Tesla of China.’ The company delivered 10,878 vehicles in November 2021, representing a 105.6% year-over-year rise. Also, its revenues for the third quarter, ended September 30, 2021, increased 116.6% year-over-year to RMB9.80 billion ($1.54 billion), while its gross profit came in at RMB1.99 billion ($313.24 million), up 240.3% year-over-year. However, the stock has declined 16.2% in price over the past month and 30.1% year-to-date to close yesterday’s trading session at $34.05. NIO investors were spooked by fears of more delistings in the future. Furthermore, analysts expect its EPS to remain negative this year and next year. In terms of forward EV/S and P/S, NIO’s respective 9.35x and 9.64x are higher than the 1.48x and 1.20x industry averages. So, the stock looks overvalued, and we think it could be wise to avoid it now.

However, the EV industry is expected to grow significantly, with governments taking initiatives to transition their countries to a sustainable energy-driven future. According to a report by Valuates Reports, the global electric car market is expected to reach $476.73 billion by 2027, growing at a 25.3% CAGR. So, instead of betting on NIO, we think it could be wise to add the following domestic EV stocks to one watch list: Fisker Inc. (FSR), Faraday Future Intelligent Electric Inc. (FFIE), and Hyzon Motors Inc. (HYZN). They are likely to be less vulnerable to Chinese authorities’ regulations. In addition, Wall Street analysts expect their shears to soar more than 45% in price in the near term.

Click here to checkout our Electric Vehicle Industry Report for 2021

Fisker Inc. (FSR)

FSR focuses on the design, development, manufacture, and sale of EVs. The company is reimagining how the world moves by producing highly sustainable vehicles. It is due to launch its first electric SUV, Fisker Ocean, with a range of 300-350 miles on a single charge.  FSR is headquartered in Manhattan Beach, Calif.

On November 2, 2021, FSR announced an  agreement with battery manufacturer and supplier Contemporary Amperex Technology Co. Ltd. Under the terms of the deal,  from 2023-2025 CATL will supply two different battery solutions for the Fisker Ocean, with an initial battery capacity of more than five gigawatt-hours annually. The agreement is expected to keep FSR’s plan to  roll out its fully electric Ocean SUV by the third quarter of 2022 on track.

For the third quarter, ended September 30, 2021, FSR’s revenues came in at $15,000. The company’s cash and cash equivalents increased 45.5% sequentially to $1.40 billion. Its current assets were  $1.42 billion for the period ended September 30, 2021, compared to $1 billion for the period ended December 31, 2020.

Analysts expect FSR’s EPS to increase 44.4% year-over-year to $0.35 for the quarter ending March 31, 2022. The company’s revenues are expected to rise 606,725% year-over-year to $242.73 million in its fiscal 2022. Over the past three months, the stock has gained 27.8% in price to close yesterday’s trading session at $17.86. Wall Street analysts expect the stock to hit $26 in the near term, which indicates a potential 45.6% upside.

Faraday Future Intelligent Electric Inc. (FFIE)

FFIE designs, manufactures, and sells EVs and related products. The Los Angeles-based company is focused on developing and creating a mobility ecosystem that integrates clean energy, artificial intelligence (AI), and the internet of things (IoT). The FF 91 happens to be the company’s first offering, with a range of more than 300 miles on a single charge.

On December 1, 2021, FFIE named HSL as the lead exterior lighting supplier for its forthcoming flagship, the FF 91 EV. HSL will supply the exterior lighting, complementing the vehicle's futuristic design. HSL’s expertise is expected to help FFIE roll out the FF 91 on schedule.

FFIE made its stock market debut on July 22, 2021, closing its  first trading day at $13.98 per share. To facilitate the listing, FFIE merged with Property Solutions Acquisition Corp., a special purpose acquisition company (SPAC). Also, the company has yet to file its earnings for the quarter ended September 30, 2021. The stock has declined 34.3% in price over the past month to close yesterday’s session at $5.51. However, Wall Street analysts expect the stock to hit $10 in the near term, which indicates a potential 81.5% upside.

Hyzon Motors Inc. (HYZN)

HYZN in Honeoye Falls, N.Y.is a hydrogen mobility company that manufactures hydrogen-powered commercial vehicles and fuel cell systems. It is involved in designing, developing, and manufacturing medium- and heavy-duty trucks and city and coach buses. The company operates across the U.S., Europe, Singapore, Australia, and China.

On December 8, 2021, HYZN announced that it had delivered 29 fuel-cell electric trucks, which will be used by steel conglomerate Shanghai Hydrogen HongYun Automotive Co. Moreover, HongYun has ordered 33 more trucks from the company, which is expected to boost its revenue.

For the fiscal third quarter, ended September 30, 2021, HYZN’s revenue came in at $962,000. The company's net income was  $32.35 million compared to a $556,000 loss in the year-ago period. Also, its EPS was  $0.13 compared to a $0.10 loss per share in the second quarter.

Analysts expect HYZN’s revenue for its fiscal 2022 to increase 492.2% year-over-year to $179.90 million. Its EPS for its fiscal year 2021 is expected to increase 11.7% year-over-year to $0.15. Over the past month, the stock has gained 15.8% in price to close yesterday’s trading session at $6.81. Wall Street analysts expect the stock to hit $13.33 in the near term, which indicates a potential 95.7% upside.

Click here to checkout our Electric Vehicle Industry Report for 2021

NIO shares fell $0.11 (-0.32%) in premarket trading Friday. Year-to-date, NIO has declined -30.14%, versus a 25.95% rise in the benchmark S&P 500 index during the same period.

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.

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