Lucid Group

Here are seven stocks that could gain significant traction through the second half of 2022

The market selloff in tech stocks offers investors a golden opportunity to buy oversold EV stocks at their most attractive valuations in years.
ChargePoint (CHPT): The leading name in the electric vehicle charging space more than doubled its Q1 revenue year-over-year.
Fisker (FSR): The Fisker Ocean is expected to start production at the Magna plant in November 2022.
Lucid Group (LCID): The company announced plans for its first overseas manufacturing facility in Saudi Arabia.
Nio (NIO): Deliveries in June jumped 60% year-over-year.
Rivian Automative (RIVN): Management is confident about delivering its full-year goal of manufacturing 25,000 EVs in 2022.
Tesla (TSLA): Reported selling a record 78,906 electric vehicles in June from its Shanghai factory.
XPeng (XPEV): The company announced plans to launch its new flagship SUV, the G9, in September.

Oversold electric vehicle (EV) stocks is our topic for today. The market selloff in tech stocks has provided investors with a golden opportunity to buy high-growth oversold EV stocks at their most attractive valuations in years.

For instance, the Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) is down around 25% year-to-date (YTD) compared with an almost 18% decline in the benchmark S&P 500 index during the same period.

The boom in EV stocks is poised to accelerate in the coming years. The Global EV Outlook 2022 report by International Energy Agency highlights that in 2021, EV sales doubled year-over-year (YOY) to a new record of 6.6 million.

Almost 10% of global car sales were electric in 2021, four times the market share in 2019. Regular InvestorPlace.com readers will likely know growth in EV sales was primarily led by China, accounting for half of the growth.

With that information, here are seven oversold EV stocks that could gain significant traction through the second half of 2022:

ChargePoint Holdings (CHPT)

52-week range: $8.50 – $28.72

ChargePoint (NYSE:CHPT) is the market leader in the EV charging space. It has around 175,000 charging spots across Europe and North America and boasts a market share of over 65%.

On May 31, Chargepoint announced first quarter (Q1) fiscal-year 2023 results. Revenue came in at $81.6 million, increasing 102% YOY. Net loss declined to 27 cents per diluted share, down from 83 cents a year ago. At the end of the quarter, cash and equivalents stood at $541 million.

Revenue generated from networked charging systems came in at $59.6 million, representing an increase of 122% YOY. As Chargepoint continues to expand its network of charging stations, subscription revenues are expected to account for a higher portion of its total revenue.

Management forecasts to bring in revenues of $96 million to $106 million for the second quarter. Such an expansion would represent an increase of roughly 80% YOY.

CHPT stock was recently down 37% YTD. Shares are trading at 15.6 times sales. Meanwhile, the 12-month median price forecast for ChargePoint stock stands at $20.

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Fisker (FSR)

52-week range: $7.95 – $23.75

Next up on our list is Fisker (NYSE:FSR), a speculative, pre-revenue EV manufacturer. Fisker Ocean, set to start production in November 2022, is sold exclusively through the Fisker app, i.e., without a dealer network.

Wall Street was initially attracted to its asset-light business model based on contract manufacturing. However, declining investor appetite for pre-revenue companies have taken the focus away from companies like Fisker.

On May 4, Fisker issued Q1 metrics. Net loss came in at 41 cents per diluted share, down from a net loss of 63 cents a year ago. Cash and equivalents ended the period at $1.04 billion.

In Q2, the company announced the launch of its second vehicle, the Fisker PEAR. The new EV model is expected to start production in 2024 at Foxconn’s facility in Ohio. Fisker anticipates reaching an annual manufacturing capacity of 250,000 PEARs in the next couple of years. Additionally, the company plans to manufacture 50,000 cars in 2023 and triple its Ocean SUV model production by 2024. The automaker currently has over 40,000 reservations for the Ocean.

This speculative EV play was recently down 42% YTD. The 12-month median price forecast for FSR stock is $15.

Lucid (LCID)

52-week range: $13.25 – $57.75

Lucid (NASDAQ:LCID) focuses on luxury EVs and developing cutting-edge EV technologies. The vertically integrated company currently manufactures vehicles in Arizona.

The EV maker reported Q1 metrics on May 5. Revenue declined from $313 million to $57.7 million on deliveries of 360 vehicles to customers. Net loss declined to 5 cents per diluted share, down from $89.29 a year ago. Cash and equivalents ended the period at $5.43 billion. Management has reiterated its production volume outlook of 12,000 to 14,000 vehicles for 2022.

On May 18, Lucid announced plans for its first overseas manufacturing facility with its partners in Saudi Arabia. The new factory is expected to bring EV manufacturing to the country with a capacity of 155,000 units. The EV maker has also signed an agreement with the Saudi Arabian government to purchase 50,000 EVs with an option to buy additional 50,000 EVs any time within ten years.

So far in 2022, LCID stock is down 52%. Shares are trading at 394 times sales. Analysts’ 12-month median price forecast for Lucid Group stock is $33.

Nio (NIO)

52-week range: $11.67 – $47.38

Chinese EV group Nio (NYSE:NIO) has been focusing on the premium segment, including technologies in artificial intelligence (AI) and autonomous driving. Over half of the global EV sales come from China. Therefore, Nio’s quarterly metrics get Wall Street’s close attention.

On Jun. 9, Nio announced Q1 results. Revenue came in at $1.56 billion, up 24.2% YOY. Adjusted diluted net loss per share was 13 cents, compared with 3 cents in the prior-year quarter. Cash and equivalents ended the period at $8.4 billion.

Q1 vehicle deliveries grew 28.5% YOY, despite an increase in price for all EV models. Deliveries in June jumped 60% YOY to almost 13,000 vehicles, highlighting the auto industry’s rebound in China. Management expects to begin deliveries of its upcoming new ES7 SUV and revised versions of ES8, ES6, and EC6 SUVs in August.

Meanwhile, Nio is on track to expand its business in Europe beyond Norway to Germany, Sweden, the Netherlands, and Denmark in the coming months. Management projects Q2 revenue to increase by 10.6% to 19.4% YOY, supported by deliveries of 23,000 to 25,000 EVs.

NIO stock has lost about a third of its value this year. Shares are trading at 6.4 times sales. The 12-month median price forecast for Nio stock stands at $30.

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Rivian Automotive (RIVN)

52-week range: $19.25 – $179.47

Rivian Automotive (NASDAQ:RIVN) focuses on electric sport utility vehicles and pickup trucks. Its portfolio of vehicles includes the R1T electric pickup truck, R1S electric SUV, and Electric Delivery Van.

The EV manufacturer reported Q1 financials on May 11. Total production was 2,553 vehicles, generating a revenue of $95 million. Adjusted net loss declined to $1.43 per diluted share, down from $4.10 a year ago. Cash and equivalents ended the period at $16.97 billion.

At the end of Q1, the company boasted a solid backlog of more than 90,000 EVs between its R1T pickup and R1S SUV, as well as 100,000 orders for its commercial delivery van from Amazon (NASDAQ:AMZN).

In Q2, Rivian ramped up production with 4,401 vehicles and delivered 4,467 EVs. Management is confident it can deliver its full-year goal of manufacturing 25,000 vehicles in 2022. However, Wall Street is not fully convinced that Rivian can produce at twice the Q2 rate in the second half of the year. Otherwise, Rivian’s full year goal is not attainable.

RIVN stock was recently down nearly 71% YTD. Shares are trading at 192 times sales. Wall Street’s 12-month median price forecast for Rivian stock stands at $45.

Tesla (TSLA)

52-week range: $620.57 – $1,243.49

Tesla (NASDAQ:TSLA) is currently the global leader in the EV space with a market share of over 60% stateside. However, recent research warns “Tesla’s US EV market share will plummet to just 19% by 2024.”

Tesla issued Q1 results on Apr. 20. Revenue jumped 81% YOY to $18.8 billion. Adjusted earnings came in at $3.22 per diluted share compared to 93 cents a year ago. Cash and equivalents ended the period at $17.51 billion.

Recent pandemic lockdowns in Shanghai have suspended production at Tesla’s most profitable plant. In June, the plant resumed production and sold a record 78,906 vehicles from its Shanghai factory. But in Q2, Tesla delivered only 254,695 vehicles. Before the lockdowns, estimates had been for 350,000 EVs.

Meanwhile, supply chain disruptions have also decreased production at Tesla’s new factories in Germany and Texas. Wall Street is paying close attention to those two new Tesla plants. They should help the EV maker reach the multi-year 50% annual production growth target.

TSLA stock was recently down almost 34% YTD. However, it is still richly valued at 65.8 times forward earnings and 13.7 times sales. Analysts’ 12-month median price forecast for Tesla stock is at $950.

XPeng (XPEV)

52-week range: $18.01 – $56.45

China-based XPeng (NYSE:XPEV) has become highly popular among the growing base of technology-savvy middle-class consumers in the country. Therefore, many analysts watch metrics from XPeng and Nio together. For instance, in June, “XPeng logged a bit more (15,295), but NIO also had a solid month (12,961).”

The EV maker released Q1 financials in late May. Revenue increased 152.6% YOY to $1.18 billion. Adjusted net loss stood at 28 cents per diluted share, up from 13 cents a year ago. Cash and equivalents ended the period at $6.58 billion.

In June, XPeng announced it had reached a milestone of 200,000 cumulative smart EV deliveries. It will also launch a new flagship SUV, the G9, in September.

In 2022, XPEV stock was recently down nearly 42%. Shares are trading at 7.1 times sales. The 12-month median price forecast for Xpeng stock stands at $36.85.

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On the date of publication, Tezcan Gecgil, Ph.D., did not have (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.

A SPAC You Will Want to Watch

SPACs have had their fair share of rises and falls these past few years. In 2020, it was mostly up. But since then, the IPOX Spac Index lost 16% in 2021 and is down another 8% so far this year. But things seem different with Gogoro. The company is reimagining the way people use and share energy.

With energy shortages becoming a concern, GGR stock offers a solution fit for the future. For one thing, Gogoro is using its innovative tech to make way for clean energy in populous cities.

With this in mind, Senior Research Analyst Ryan Citron from Guidehouse Insights says: Battery Swapping is emerging as a breakthrough technology that could greatly accelerate the adoption of light electric vehicles. Most important, battery swap networks can eliminate range anxiety, reduce upfront vehicle costs and address consumer concerns around slow EV charging.

This sounds like a game-changing technology worthy of landing on your watchlist.

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“Powering 95% of All-Electric Two Wheelers”

Gogoro launched its battery swap service in 2015, and it’s already the go-to option for two-wheel vehicles in Taiwan. For example, Gogoro battery swap is the power behind 95% of all-electric two-wheelers in Taiwan.

Yes, that’s a whopping 95% in a city with over 23.8 million people. Not only that, but the company is expanding rapidly into other major territories such as China (1.4B residents), India (1.4B) and Indonesia (278M).

However, these nations have something else in common. They are also some of the most polluted countries worldwide in 2022.

No. 5 India
No. 6 Indonesia
No. 11 China

So, GGR stock has a massive opportunity to expand its product into the most populated nations in need of clean energy.

How a Battery Swap Service Works

You might be wondering how does a battery swap service work? Well, the idea is fairly simple.

Like going to the gas station, customers pull up to one of over 2,300 GoStations.
Then, upon arrival, users can swap their drained battery for a newly charged one.

The process is much quicker than the typical EV charging session. Even a Tesla supercharger takes 15 minutes, giving up to 200 miles.

Swapping batteries makes more sense. Rather than waiting for a half-charged battery, users can receive a fully charged one in seconds.

Scroll to the bottom to see if GGR stock is right for you.

Why GGR Stock Is Worth Watching

Besides going public just this past week, Gogoro is also located mainly in Taiwan at this point. So, if you don’t recognize the name yet, you’re not alone.

But what you may not know is that the company makes its tech available for use through its Powered by Gogoro Network (PBGN). The PNGN allows partners to use the battery tech to build their own two-wheel EVs, which can then use the swapping stations, promoting an EV ecosystem.

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Think about it:

If a company can build a cheaper EV model using Gogoro’s network, then why not?

For this reason, the firm is partnering with companies in major metro areas. For example:

Yadea & DCJ in China (Two of the world’s top electric scooter companies).
Hero MotoCorp in India (the world’s largest manufacturer of motorcycles and scooters).
Electrum in Indonesia (The world’s third largest two-wheel market).

Furthermore, PBGN powers products from Yamaha, Aeon Motor and PGO.

Gogoro Stock Flying Under the Radar?

If you are saying, okay, this sounds great and all, but why is GGR stock down over 40% already. For one thing, EV stocks are down significantly this week. Tesla is down 10%, Lucid Group (Nasdaq: LCID) is down 14% and NIO (NYSE: NIO) 15%.

Yet this doesn’t explain why Gogoro is falling further than the overall market. Looking at the company’s short price history, there was major selling on Monday, April 11.

A possible explanation for this is private market investors selling a part of their GGR shares as the company goes public. At the same time, investors are nervous about jumping back into growth stocks with popular ETFs like ARK Innovation (NYSE: ARKK) down over 50% in the past year.

And lastly, with investors focusing on other sectors such as energy and cyclical, is GGR stock overlooked? Or, it might be due to increasing competition. Both NIO and CATL (Tesla battery supplier) are starting their own battery swap services.

One Last Thought: Is GGR Stock the Right Investment for You?

Nobody can deny the limitless potential this tech can bring to the over $280B EV market. Not only that, but Gogoro is bringing clean energy to markets in desperate need of it.

Most important, Gogoro is rapidly growing its addressable market. Although two-wheel vehicles are not as popular in the west, they are huge in Asia and are expected to continue growing steadily. In fact, new research shows the two-wheel vehicle market is forecast to grow at an annual compound rate of 8.63%.

Gogoro’s battery swap service can help speed up the growing need for EVs worldwide. At the same time, while the firm expands its position, profits are likely a way out. Revenue dipped in 2021 due to less government support. But, as the firm gains momentum, they expect sales to accelerate significantly.

Think of Gogoro as a battery-as-a-service model. Though electric scooters are carrying the sales right now, the battery swap subscription is quickly accelerating. And on top of this, licensing fees are starting to pile up.

With this in mind, the company expects revenue to grow 52% year-over-year YOY in 2022, 85% in 2023 and another 85% in 2024. If this is the case, GGR stock is severely undervalued at these levels.

Then again, these are very early projections. We will see a clearer picture as the company progresses this year. GGR stock may be worth taking a bet for risk-takers looking to get in on the ground floor.

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