Electric vehicle (EV) stocks took a hit in Q4 of 2023 as the long-term outlook for EV demand decreased. Many stocks that surged over the past three years now face price corrections as consumer values change. Despite the environmental benefits of EVs, most consumers lack access to robust charging networks that would make owning an EV practical.
As such, EV companies, which seemed like the future of personal transportation, are now struggling to increase sales. A few EV stocks are still showing promise, however, thanks to their specialized approach to the electric vehicle market. That’s because, even though EVs may be decades away from replacing petrol-powered cars, there are plenty of opportunities to shine.
While the value of EV stocks overall remains to be seen, these three companies currently capture niche EV markets. That, in turn, provides investors with strong options in the EV market during a period of industry price correction.
Li Auto (LI)
Steady sales for much of 2023 put Li Auto (NASDAQ:LI) on everyone’s EV radar last year as the industry slowed. Though Li Auto has yet to break into the U.S. auto market, the company’s global markets continue to broaden. While Americans may not be driving Chinese EVs any time soon, investors can still profit from Li Auto’s strategies abroad.
For the East Asian auto market, Li Auto’s portfolio of SUVs outperformed Tesla’s Model X and Model Y. In China, in particular, there are likely two drivers for this trend. First, Chinese consumers tend to trust and prefer domestic products for cultural and political reasons. Second, all of Li Auto’s offerings include a gas tank to power a secondary engine should the battery run out.
The expanded range feature is coming to Li Auto’s new Li MEGA minivan, slated to release this year. With a corner on the electric SUV and minivan market in East Asia, Li Auto remains a strong buy option.
Blue Bird (BLBD)
Mastering the electric bus has proven exceptionally lucrative for Blue Bird (NASDAQ:BLBD). With its focus on school buses, BLBD has seen increased demand for its zero-emission electric transports, year after year. Since buses are charged in large depots when not in use, they are more cost-effective than standard bus configurations.
For school districts that provide thousands of students with daily transportation, the decreased maintenance and fuel costs are a no-brainer. Further sweetening the deal, thanks to the Inflation Reduction Act, schools that invest in electric bus fleets receive tax rebates. That has led to over 300 fulfilled electric bus orders for Blue Bird, with another 180 on the way.
Though the market for consumer EV stocks is cooling off, EVs in mass transit are just starting to take off. For investors looking for a strong buy option in the electric vehicle industry, Blue Bird offers significant potential upside.
General Motors (GM)
With several EV attempts in the last two decades, American auto giant General Motors (NYSE:GM) is no stranger to the industry. For this company, however, getting electric vehicles to the market and succeeding in sales has been a bumpy road. Part of the problem was underfunded EV development at GM, but that was also due to a lack of customers.
Now, as car buyers are considering EVs more heavily, GM announced a commitment toward a fully electric future. How this will pan out remains to be seen. But one advantage GM has among EVs is brand recognition. Currently, its brands are the best-selling in America, building long-term trust between cars and their owners.
As such, once EV infrastructure becomes more robust and consumers adopt this all-electric approach, it may be with a GM. That positions the company as one of the better stocks to buy for the future of EVs.
On the date of publication, Viktor Zarev did not hold (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.
