Electric vehicles took the world by storm when they were first introduced. For many, they seemed like the ultimate solution to ensuring sustainability and escape from the rising fuel market. However, this excitement was short-lived as the popularity of electric vehicles dropped after some time.
While many opted to buy these vehicles and are saving hundreds of dollars on fuel prices, others opted to invest in the electric vehicle penny stocks list so they can benefit from the growing popularity of these vehicles while diversifying their portfolios. But are electric vehicles really a worthy investment?
Here are a few things to consider when it comes to investing in electric vehicles:
- They are still relatively new
Compared to fuel-powered vehicles, EVs are fairly new in the market, and these companies are constantly competing with companies that have long ago established their footing in the market.
Moreover, as these brands have been around for a really long time, they have a more loyal consumer base who is willing to buy from these brands whenever a need arises. This makes it crucial for EV companies to place themselves in a position where customers can trust them.
- They have a higher valuation
Many EV companies have their valuation based on future possibilities and not on current profitability. This means that even if the company is currently running into losses, it can still hold a higher valuation under the pretext of future growth possibilities. This makes it important for investors to identify if such EV stocks are worthy of investing or if they can be skipped for now. Stocks like Tesla, Li Auto, XPeng, ON Semiconductor, and Aehr Test Systems are strong contenders you can consider investing in. These companies are set to rise and have a reputation for coming up with innovative technologies.
- Competing with traditional manufacturers
While EVs were trending and seemed to be the future of cars, many traditional car manufacturers like General Motors, Nissan, and Volkswagen also caught wind of the trend and came up with their own range of electric vehicles. These brands are more trusted and are known for their technology, innovation, and customer services, giving new-age electric vehicle manufacturers tough competition.
- Charging infrastructure
It is estimated that in the US alone, there are 138,000+ charging outlets spread across the country. These charging outlets might not be capable of charging all the electric vehicles, calling for more installations. Companies like Tesla Motors Inc., Broadband TelCom Power, Inc., Oscar W. Larson Co., and Wallbox USA Inc. are engaged in making electric vehicle charging stations.
However, there is still a significant gap in the cars being delivered to the total number of charging stations available. Aside from installing these stations, these companies are also required to perform regular maintenance and performance checks to ensure that the charging stations are safe to use and are able to charge the EVs efficiently.
- Government regulations
The Federal government has been issuing regulations, mandates, and updates that encourage more households to switch to electric vehicles and contribute towards lowering the overall environmental impact. The government has, in fact, laid a strong foundation for ensuring electric vehicles become the transportation of the future.Â
The government has come up with incentives and has funded the manufacturers to install more charging stations throughout the country. Some of these benefits include purchase incentives, federal fleet electrification, and charging infrastructure funding. Aside from these, there has also been an introduction of EV manufacturing and supply chain funding and programs, battery material processing, manufacturing, and recycling grants, encouraging EV manufacturers to establish themselves firmly.
Bottomline
Electric vehicles are certainly the future, and even though the road may seem bumpy, they are a worthy investment. However, if you are uncertain about making this investment, you can consider buying a stock or two from this industry. It will diversify your portfolio, minimize risk, and ensure that you are able to earn gains as the industry becomes more prominent and profitable.
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Whether she is researching the latest trends in home decor, life-changing destination getaways, or the best way to maintain your finances, Dewey takes pride in leaving no stone unturned. She is passionate about distilling and delivering high-quality information that you can use to upgrade your life.
