In this article, we will be taking a look at the 10 best small cap electric vehicle stocks to buy. To skip our detailed analysis of the electric vehicle industry, you can go directly to see the 5 Best Small Cap Electric Vehicle Stocks to Buy.
Is There An EV Revolution?
The creation of electric vehicles (EVs) has led to talks in the market surrounding whether or not this new class of vehicles is going to take over the automobile manufacturing industry. Conventional cars and ways to power those cars may fast fall out of fashion as the global community gets swept away by rising climate change concerns and a desire to live a more green life in all aspects, including the decision of which car you should drive. EVs promise a future that is bound to be healthier for the environment, and in that promise, these vehicles are gaining popularity among governments and climate-conscious consumers alike. But is this popularity enough to bring about an EV revolution?
On July 27, CNBC's Last Call featured an interview with Mark Fields, the former CEO of Ford Motor Company (NYSE:F). This is what he had to say about the current condition of the EV market:
"In the second quarter, the EV market hit a record. We'll probably sell a million EVs in the US this year at total, and the market share of EVs is about 7%, which is about double what it was last year. The problem is that demand for EVs is not keeping up with production. You have all the automakers introducing new products this year, there's a lot more coming next year, and you know, when you look at some of the barriers like price range and charging infrastructures - you know, getting early adopters to buy your product is one thing, getting mass adoption is a whole lot harder."
The astronomical prices of EVs have been acting as a barrier to their sustained success in the long run, according to Fields. He believes that automakers need to learn from their first-generation products and then work on making their second-generation products better and even more affordable. He does believe that some automakers are in the process of doing just that, in which case "mass adoption" of EVs, as Fields put it, may not seem like an entirely far-fetched goal. Another thing Fields thinks automakers like Li Auto Inc. (NASDAQ:LI), Tesla, Inc. (NASDAQ:TSLA), and Rivian Automotive Inc. (NASDAQ:RIVN) should consider is how to ensure their manufacturing plants are brought up to full capacity so that they can bring manufacturing costs down as well as their sales prices.
Support For EV Makers In The Face of Barriers
Another vital point Fields discussed in his interview was the need for developments that make owning and driving EVs ultimately more convenient for the consumer. Here's what he said on the matter:
"There has to be a compelling reason to buy these EVs. If I don't have a two-car garage where I can charge my vehicle at night it's gonna inconvenience me to spend 45 minutes at a charger to fill up, if you will. You could argue that this isn't gonne be solved until you get to solid-state EVs which have a much shorter charging time and are more akin to filling up at the gas station."
The solid-state battery for EVs is expected to be a "game changer" for the entire EV industry in this manner since they are expected to make the entire experience of driving and owning an EV much more convenient for the consumer at the end of the day. Automakers, thus, have to focus on these factors moving forward. Additionally, they can rest assured that they have immense governmental support in their efforts to make EVs more accessible to the everyday consumer. President Biden has long pushed a goal of increasing EV sales in the US by 2030, making it so that by that year, 50% of all new vehicle sales will be electric. His investments in the EV industry have resulted in EV sales tripling since he took office in January 2021, while the number of publicly available charging ports in the US has also increased by more than 40% during the same period. Moreover, Biden's Inflation Reduction Act (IRA) has also added and expanded tax credits for the purchase of new and used EVs, which is further helping the spread of EVs across the country in numerous communities.
All in all, while the road to achieving an EV revolution still seems to be long, current efforts by automakers and governmental support are among the host of factors that are leaving the public optimistic about seeing this revolution come about in the foreseeable future. In light of this, we have compiled a list of small-cap EV stocks to buy in 2023 for those looking to enter this market at an opportune time. These include EV stocks under $5 and even some EV stocks under $1 if you are looking for more affordable options in this market.
10 Best Small Cap Electric Vehicle Stocks to Buy
Our Methodology
We used a stock screener to find electric vehicle manufacturing companies with market capitalizations below $2 billion. From these names, we shortlisted the ones with the highest number of hedge fund investors by using Insider Monkey's hedge fund data for the first quarter. The stocks are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest number.
Market Capitalization as of July 28: $77.29 million
Mullen Automotive Inc. (NASDAQ:MULN) is an automobile manufacturing company that focuses on the manufacture and distribution of electric vehicles. It is based in Brea, California. The company offers passenger EVs and commercial vehicles alongside solid-state polymer battery technology.
Four hedge funds held stakes in Mullen Automotive Inc. (NASDAQ:MULN) at the end of the first quarter. Their total stake value in the company was $231,000.
Like Li Auto Inc. (NASDAQ:LI), Tesla, Inc. (NASDAQ:TSLA), and Rivian Automotive Inc. (NASDAQ:RIVN), Mullen Automotive Inc. (NASDAQ:MULN) is an EV stock worth considering for your portfolio.
Market Capitalization as of July 28: $105.68 million
Cenntro Electric Group Limited (NASDAQ:CENN) designs, manufactures, distributes, and services commercial vehicles. Its vehicles are powered by electricity or hydrogen energy sources, and it provides its products in Europe, the US, and Asia. The company is based in Freehold, New Jersey.
Cenntro Electric Group Limited (NASDAQ:CENN) was seen in the portfolios of four hedge funds at the end of the first quarter, with a total stake value of $467,000.
Market Capitalization as of July 28: $242.21 million
As of July 29, Christopher Souther, an analyst at B. Riley Securities, maintains a Buy rating on shares of Workhorse Group, Inc. (NASDAQ:WKHS). The analyst also placed a price target of $3 on the stock.
Workhorse Group, Inc. (NASDAQ:WKHS) is an automobile manufacturer based in Sharonville, Ohio. It designs, manufactures, and sells zero-emission commercial vehicles in the US. Some of its products include electric and range-extended medium-duty delivery trucks and drone systems.
There were eight hedge funds long Workhorse Group, Inc. (NASDAQ:WKHS) in the first quarter. Their total stake value in the company was $1.7 million.
D E Shaw was the most prominent shareholder in Workhorse Group, Inc. (NASDAQ:WKHS) at the end of the first quarter, holding 684,181 shares in the company.
Market Capitalization as of July 28: $661.76 million
Coliseum Capital was the largest shareholder in Blue Bird Corporation (NASDAQ:BLBD) at the end of the first quarter, holding 4.7 million shares in the company.
Blue Bird Corporation (NASDAQ:BLBD) operates in the construction machinery and heavy transportation equipment industry as a manufacturer of school buses and related parts. Its buses include those powered by electricity, alongside others powered by propane, gasoline, and compressed natural gas. The company is based in Macon, Georgia.
Michael Shlisky, an analyst at DA Davidson, maintains a Buy rating on shares of Blue Bird Corporation (NASDAQ:BLBD) as of May 12. The analyst also raised his price target on the stock from $23 to $29.
Eight hedge funds held stakes in Blue Bird Corporation (NASDAQ:BLBD) in the first quarter, with a total stake value of $125.7 million.
Market Capitalization as of July 28: $312.89 million
A total of nine hedge funds held stakes in Canoo Inc. (NASDAQ:GOEV) in the first quarter. Their total stake value in the company was $15.1 million.
A Buy rating was maintained on shares of Canoo Inc. (NASDAQ:GOEV) on June 27 by J. Bruce Chan, an analyst at Stifel. The analyst also placed a price target of $1.50 on the stock.
Canoo Inc. (NASDAQ:GOEV) is a mobility technology company operating in the automobile manufacturing industry. It designs, engineers, develops, and manufactures electric vehicles for commercial and consumer markets in the US. The company is based in Torrance, California.
Infini Capital held 16.7 million shares in Canoo Inc. (NASDAQ:GOEV) at the end of the first quarter, making it the largest hedge fund investor in the company.
Like Li Auto Inc. (NASDAQ:LI), Tesla, Inc. (NASDAQ:TSLA), and Rivian Automotive Inc. (NASDAQ:RIVN), Canoo Inc. (NASDAQ:GOEV) is an EV stock many elite hedge funds are piling into today.
