5 Best Electric Vehicle (EV) Stocks to Buy in September 2021

The pivot towards electric vehicles (EVs) has created a lot of investment opportunities. 2020 was a transformational year for EV stocks as markets rerated them following Joe Biden’s election.

There was a sharp rally in electric vehicle stocks in 2020. However, the sector has been out of favor this year amid valuation concerns. The chip shortage situation, that has hit production plans of several EV companies hasn’t helped matters either. That said, EV stocks are a good long-term investment opportunity. Here are five of the best EV stocks that you can buy in September 2021.

1. Lucid Motors (NYSE: LCID)

Touted as the “next Tesla” Lucid Motors stock has risen sharply over the last few trading sessions. It had tumbled earlier in September amid fears that PIPE (private investment in public equity) investors would cash out. However, it soon recouped losses and the upcoming Lucid Air production preview could help buoy sentiments further.

Bank of America finds Lucid Motors a good electric vehicle stock to buy

Several brokerages have initiated coverage on LCID stock. While Adam Jonas of Morgan Stanley is bearish on Lucid Motors stock, most other brokerages have a bullish view. Bank of America issued a bullish note on the electric vehicle startup company and called it the “Tesla/Ferrari of new EV automakers”

To be sure, LCID has managed to build an aura around the brand and the product specifications also look encouraging. Lucid Air would have a higher range than other electric vehicle models including that from Tesla.

Expressing optimism over LCID stock, Bank of America said “Our Buy rating on Lucid Group is predicated on our view that the company is one of the most legitimate among the universe of start-up electric vehicle (EV) automakers and also a relative competitive threat to the universe of incumbent automakers.”

Meanwhile, while Lucid Motors’s $40 billion valuation appears high when looked at in isolation, it does not look too pricey when compared with Tesla. The upcoming Lucid Air production preview event makes it an EV stock worth looking at in the short term also.

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2. NIO (NYSE: NIO)

After the humongous 1,100% rise in 2021, NIO stock is down almost a third this year. It is underperforming Chinese electric vehicle stocks in 2021. The company has been hit by the chip shortage situation and recently lowered the delivery guidance for the third quarter. The company has had to lower the delivery guidance in the first quarter also.

NIO is a good electric vehicle stock for the long term

Also, the frequent capital raised by NIO has taken a toll on sentiments. The long-term forecast for the stock looks bullish though. NIO has the tacit support of the Chinese government and the country has a special subsidiary category for battery swapping where only NIO qualifies. The country also bailed out the company when it was struggling with capital raise last year. Over the long-term launch of new models and entry into new markets will drive value for investors.

Citi is bullish on NIO stock

NIO has already announced an expansion in Europe beginning with Norway and hinted at targeting Germany next.  Citi is bullish on NIO stock and in its note last month it said “We expect NIO to benefit from the overall China NEV (New Energy Vehicle) Passenger Vehicle sector upgrade, as well as accelerating orders as the sector’s beta proxy. We expect NIO to further gain market share from JV brands while the sector bottoms out.”

NIO currently trades at an NTM (next-12 months) enterprise value to revenue multiple of 7.6x which is near the lowest that we’ve seen over the last month. NIO’s strong product proposition, battery swapping technology, and support from Beijing make it among the best electric vehicle stocks to buy.

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3. Canoo (NYSE: GOEV)

Among the startup electric vehicle companies, Canoo stock looks like a good bet. The stock is currently also popular on Reddit group WallStreetBets and a short squeeze could lead to a short-term spike in GOEV stock. GOEV stock went public through a SPAC merger last year. Several other EV companies opted for a SPAC reverse merger to go public.

Canoo is a popular electric vehicle stock on WallStreetBets

The company has been progressing on its production plans and had sourced 87% of the components at the end of the second quarter which was 13 percentage points higher than the previous quarter. After excluding bulk materials, the company has sourced 95% of the total components. The company also announced that Oklahoma has committed $300 million in non-dilutive financial incentives to support its plant.

GOEV would launch the first product in 2022 which would be a lifestyle model names Canoo. It would then subsequently come up with multipurpose delivery vehicles and pickup trucks.

Meanwhile, the company’s current valuations look on the lower side as compared to some of the other electric vehicle stocks. Given the differentiated approach taken by Canoo, it looks like a good electric vehicle stock to buy for the long term. GOEV stock has fallen sharply this year and the crash looks like a good buying opportunity.

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4. Ford (NYSE: F)

Legacy automakers have also been working towards vehicle electrification plans and would give a tough fight to pure-play electric vehicle companies. Ford would come up with the all-electric version of its best-selling F-150 next year which could be a key driver for the stock. The company has been transforming itself under the new CEO Jim Farley and the stock’s price action shows that the market is impressed with the turnaround.

Legacy automakers could challenge electric vehicle companies

Legacy automakers like Ford could challenge pure-play EV companies. Looking at the early signs, including the pre-orders for the F-150 electric model, Ford very mush looks in the electric vehicle race.

Looking at analyst ratings, of the 23 analysts covering Ford stock, 13 have a buy rating while nine rate them as a hold. One analyst has a sell rating. Its median target price of $17 implies a 24% upside over the next 12 months. The street high target price of $18 is a 31% premium.

Ford stock looks attractive looking at its tepid valuations where it trades in single digits forward PE numbers. While the company is facing short-term headwinds, its long-term forecast looks positive.

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5. Lion Electric (NYSE: LEV)

Lion Electric is a Canada-based producer of commercial electric vehickes. While a lot of startup EV companies are yet to deliver their vehicles, Lion Electric has delivered almost 400 vehicles which have driven 8 million miles cumulatively. The company’s order book looks strong and it has orders for several vehicles.

LEV is a niche electric vehicle stock

LEV is a niche electric vehicle stock to buy and play the commercial electric vehicle industry. Wall Street analysts have a bullish forecast for LEV stock and six of the seven analysts covering it rate it as a buy. One analyst has a hold rating. The stock’s median target price of $20 implies an upside of 50% over current prices.

While almost all other startup EV companies face execution risk, the risk is much lower for Lion Electric. It looks like a good electric vehicle stock to buy as operators globally shift their fleet to zero-emission vehicles.

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