Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
Although 2020 was marked by record traffic reduction thanks to the pandemic, the Electric Vehicle (EV) market share is poised to grow. Not only do EVs have institutional support, but the eco-friendly culture in developed nations is fertile for EV growth. Tesla cars may have become a coveted status symbol, but these penny stocks pave their own paths in the EV market.
Are There any Electric Vehicle Penny Stocks?
In Norway alone, nearly 60% of newly registered cars were EVs in March 2018. In China, by 2022, EV sales figures are expected to surpass 3.7 million. Thanks to lowered lithium battery cost, greater range and efficiency, a wider proliferation of charge port sites, and combating climate change, EVs represent the future of personal transportation.
In the wake of Tesla’s latest earnings report, continuing its 5th consecutive quarter of profitability, less known EV companies stand to benefit. Elon Musk may have focused on luxury EVs, but this serves an important function of dissolving any remaining reservations people might have about EVs as a concept. As technology progresses, it’s important to keep track of other EV players who aim to cater to budget-oriented customers.
With a market that is projected to reach $567 billion in the US alone by 2026, keep an eye on these EV penny stocks as they try to tackle the big hurdle of EV – affordability. Although prone to volatility, the leading penny stock brokers provide you with easy entry into the stock market — at under $5 per share.
Electric Vehicle Penny Stocks with Potential
May retail investors are surprised to learn about the many EV penny stocks available. Most are accessible through popular stock apps such as Robinhood. Here, we provide some analysis covering three EV penny stocks worth looking into.
Almost every sci-fi movie has its vision of the future peppered with small, silent electric cars. Electra drew inspiration from them by designing a one-driver, three-wheeled EV called SOLO.
Somewhere in-between a car and a motorcycle – autocycle – SOLO’s price tag is under $20k, not accounting for various subsidies depending on your state. Ideal for congested city traffic, Electra first launched SOLO in Los Angeles, with plans to expand to Portland, Seattle, and San Francisco – all well-known as eco-minded first-adopter cities.
For the last year, Electra has been looking for its manufacturing facility site, with Arizona and Tennessee emerging as finalists. With the potential to create up to 500 new jobs for the region, Electra Meccanica CEO, Paul Rivera, expects to gain secondary SOLO orders as a result.
Analysts expect the company to grow with an estimated revenue between $80 and $110 million. For 2020, the forecast is +26% compared to the previous year. If you are a short-term investor, the company’s stock is currently rated as a Hold, but long-term indicators mark it as a Buy. As a secondary vehicle that you can drive in bad weather, unlike with motorcycles, on top of its affordability as an entry EV, SOLO certainly holds potential.
Senmiao is not in the business of designing and manufacturing EVs, but in the automobile transaction business. Serving as facilitators between auto dealers, consumers, and financial institutions, Chinese Senmiao made big news recently.
Thanks to the newly-signed Framework Agreement with BYD Auto Sales Co., Senmiao is projected to acquire a minimum of 5,000 EVs during 2020 and 2021. With BYD, they will also engage in the promotion of EVs for the ride-sharing market.
Furthermore, China has recovered quite rapidly from the coronavirus pandemic. They have stopped bothering to count cases and resumed normal life. As a result, China’s GDP growth rises to 4.9%, while Western nations plunge into recession and continue to inflict ill-advised lockdowns.
Like Electrameccanica, AYRO offers a three-wheeled autocycle with its AYRO 311 model. However, the company is more focused on purpose-built vehicles with utility in mind for short-haul deliveries, urban commute, and college campus transport. This design philosophy is represented with their Club Car 411 model.
Therefore, the Austin-based company has its own niche to cater to. Recently, AYRO signed a deal with Karma Automotive, an EV company on the opposite side of the EV spectrum, focusing on luxury EVs. Unsurprisingly, Karma offers superior engineering and design capacity, which will be harnessed by AYRO.
Over the next three years, the partnered companies plan to deliver about 20k Club Car 411-style vehicles for light delivery and transport duty. This makes the deal worth at least $300 million. AYRO’s earnings-per-share (EPS) has gone from -$40.79 in Q3 2017 to -0.18 for Q2 2020.
Have you had an opportunity to drive an EV? Outside of producing almost no noise and their environmental benefits, what else did you like about them?
Disclosure:Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.