Electric vehicle (EV) stocks have had a rough start to 2024 as sales growth in the sector has slowed. Additionally, there are now more EV brands for consumers to choose from as both older automakers and new companies have entered the market. Nevertheless, EV stocks still have strong long-term potential.
Let’s take a look at two EV stocks that could perform best through 2030.
Tesla
This year has not been kind to the EV leader Tesla (NASDAQ: TSLA). The company saw first-quarter sales fall 9% to $21.3 billion, while auto revenues fell 13% to $17.4 billion. The number of car deliveries fell by 9% to 386,810, while average vehicle sales prices also fell. This led to adjusted earnings per share plummeting 47% to $0.45, despite a cash outflow of $2.5 billion.
As a result of the poor start to the year, Tesla shares are down about 28% this year. However, Tesla is about more than just electric cars, and an investment in its stock is an investment in the vision of founder Elon Musk. The company has several initiatives that could potentially push its stock price much higher by 2030.
One of the biggest initiatives is self-driving vehicles and the creation of a fleet of robotaxis. Tesla has long been at the forefront of self-driving technology and plans to unveil its robotaxis later this year in August. With a fleet of robotaxis, the company would compete directly Uber And Lyft, but would give Tesla the big advantage of not having to pay drivers. And when his fleet is not in use, Musk has talked about using their computing power for AI inference to add additional revenue opportunities.
The company’s energy storage activities have now grown robustly. Musk has long predicted that this company would grow faster than his car business, as its utility-grade megapack batteries are used in some of the largest energy storage projects in the world. The company expects this business to grow at least 75% this year and continue to grow strongly in the coming years.
However, during Tesla’s latest conference call, Musk predicted that its Optimus robot business could become the largest part of the company. He expects the humanoid robots will be able to perform useful tasks within Tesla factories by the end of the year and then perhaps be ready to sell externally by the end of next year.
Tesla has a lot of irons in the fire to drive growth, which is why it should be one of the top EV performers through 2030.
Rivaans
Rivian automotive industry (NASDAQ: RIVN) The stock has had a rough year, with a more than 50% decline through 2024. Unlike Tesla, Rivian has seen solid sales and vehicle delivery growth so far in 2024. In the first quarter, sales increased by 82% to $1.2 billion, while vehicle deliveries increased by 71%. up to 13,588 vehicles.
The company’s problem is that it is currently selling its vehicles below the cost of production. This is evident from the company’s gross margin per vehicle, which a negative $38,784. This also causes the company to burn a lot of cash, with it recording negative free cash flow of $1.5 billion in the quarter.
However, Rivian is working to improve this situation by reducing the production costs of its vehicles. This includes a redesign to reduce the number of electronic control units in its vehicles and finding cheaper alternative materials. The company is also upgrading technology at its production facility to improve line speed. With this work, the company aims to achieve a modest gross margin gain in the fourth quarter.
That also works to Rivian’s advantage Amazon is the largest shareholder, with a stake of more than 16%. The e-commerce giant also has a deal with the company to purchase 100,000 of its electric vans, to be delivered by 2040.
Amazon has been slow to take delivery of these vehicles due to a lack of charging station infrastructure, but has now completed the installation of 17,000 chargers across 120 warehouses, making it the largest operator of private EV charging stations. Now that the infrastructure is in place, you can expect order deliveries to increase.
Given its negative gross margins and cash outflows, Rivian is a speculative stock, but it has the necessary pieces to become profitable and one of the best performing EV stocks through 2030.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Amazon, Tesla and Uber Technologies. The Motley Fool has a disclosure policy.
Prediction: These Could Be the Best Performing EV Stocks Through 2030 Originally published by The Motley Fool
