7 EV Stocks With Huge Return Potential for Long-Term Investors

Stocks to buy

Electric vehicle (EV) sales are picking up. The International Energy Agency (IEA) just released a new report that shows electric vehicle sales around the world rose 55% in 2022 and surpassed 10 million units for the first time. The IEA said that more than 26 million electric vehicles were on the roads in 2022, up 60% from 2021.

Looking forward, the IEA forecasts that worldwide electric vehicle sales will reach about 14 million units this year. China continues to lead when it comes to the adoption of electric cars, trucks, and sport utility vehicles (SUVs), with more than half of all-electric vehicles now based in the country of 1.4 billion people. However, the adoption of electric vehicles is gaining ground in the U.S. and growing in developed countries, notably India. With many jurisdictions planning to ban gasoline-powered vehicles by 2035, the growth of electric vehicles is forecast to explode in the coming years. Here are seven EV stocks with huge return potential for long-term investors.

EV Stocks: Tesla (TSLA)

Tesla (TSLA) logo on a smartphone screen stock image. Tesla is an innovative company focused on producing sustainable electric vehicles and clean energy solutions

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We’ll start with Tesla (NASDAQ:TSLA), which remains the world’s top electric vehicle manufacturer. To be sure, the company and its mercurial leader Elon Musk remain controversial for a number of reasons. And the stock continues to be volatile. Yet Tesla’s growth continues unabated. The company recently announced that it is on track to produce 1.8 million to two million vehicles this year, which would keep it streets ahead of its competitors in terms of EV production.

TSLA stock suffered a massive selloff last fall after Musk purchased the social media company Twitter. However, it has bounced back this year and has risen 45% since January. The share price pulled back in recent weeks following an earnings miss by Tesla, but there are several catalysts for the company looming on the horizon, including the launch of its highly anticipated and long-gestating Cybertruck and a new manufacturing plant in Mexico. Thus, it’s one of the best EV stocks you can buy right now.

General Motors (GM)

Image of General Motors logo on corporate building with clear sky in the background.

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Hot on Tesla’s heels is U.S. auto giant General Motors (NYSE:GM). The Detroit automaker is spending $35 billion through 2025 to transition its vehicle fleet to electric power and trying to surpass Tesla as the global leader in electric vehicle sales. This includes electric versions of the Silverado truck and Hummer SUV. Not wanted on the journey is the Chevy Bolt, GM’s first mass-market EV. The company announced plans to phase out the Bolt later this year as it transitions to newer battery technologies and higher-end electric vehicle models.

The shift to electric vehicles has not been a smooth one for General Motors, impacting its earnings and stock. In the last 12 months, GM stock has fallen 15% and is now trading at the same level it was at three years ago. However, the company’s latest earnings show some light at the end of the tunnel. The automaker just issued a first-quarter earnings beat and raised its forward guidance, saying cost-cutting measures have helped it achieve internal efficiencies.

QuantumScape (QS)

A sign for QuantumScape (QS).

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Switching to a more specialized area of the EV sector, we come to QuantumScape (NYSE:QS), the maker of solid-state lithium-ion batteries that many people see as the future of the industry. In theory, the technology being developed by Quantumscape could substantially reduce battery-charging times while also increasing the life of batteries and the distance EVs can travel on a single charge. Quantumscape is working on a battery that could give EVs a driving range of 650 km while lowering the time to recharge a battery to 15 minutes.

The potential demonstrated by Quantumscape has attracted prominent investors such as Microsoft (NASDAQ:MSFT) co-founder Bill Gates and German automotive giant Volkswagen (OTCMKTS:VWAGY). Volkswagen has put more than $300 million into QuantumScape and is the company’s largest shareholder. To be clear, Quantumscape is a start-up company, and this reality is reflected in QS stock. Following a steep decline in 2022, the share price has risen nearly 4o% so far this year. An investment could pay off in the long run.

ChargePoint (CHPT)

A close-up of an orange ChargePoint (CHPT) station.

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Another company that is heavily involved in building the infrastructure needed to run electric vehicles is ChargePoint (NYSE:CHPT). The company has the distinction of operating the largest network of EV charging stations in the U.S. and around the world. Currently, ChargePoint has EV charging stations up and running in 14 countries and growing. ChargePoint is poised to capitalize as governments worldwide shell out billions of dollars to build out the charging station networks that are needed to promote mass adoption of EVs.

ChargePoint is another EV start-up, and the company is not yet profitable. This has negatively impacted CHPT stock, which is down 38% over the last 12 months. The company went public in the autumn of 2020. However, despite the decline in its share price, ChargePoint is well-positioned to ride the long-term growth in the electric vehicle sector and is expected to play a leading role in the development of EV charging stations that analysts say need to become as commonplace as gas stations around the globe. That’s why I believe it’s one of the best EV stocks.

Li Auto (LI)

A front view of the Li Xiang One SUV from Li Auto.

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Looking abroad to China and Li Auto (NYSE:LI), which is emerging as one of the more competitive and better-performing Chinese EV stocks. Over the last year, LI stock has gained 6%. The stock has recovered immensely in the past six months, having gained 38% since October 2022. The outperformance has helped to separate Li Auto from other Chinese electric vehicle makers whose share prices continue to lag on weak financial results and poor execution.

Strong delivery numbers have helped to propel LI stock higher since last fall. In this year’s first quarter, Li Auto delivered 52,584 EV models to customers, a 65% year-over-year increase. In all, the company has now delivered more than 300,000 EVs, mostly within the domestic Chinese market. Li Auto has also impressed with its financial results, most recently reporting earnings per share (EPS) of 13 cents, which was nearly double the 7 cents a share consensus forecast by analysts. Growth is expected to continue as China goes all-in on electric vehicles, and EV stocks like Li are set to capitalize on the tailwinds.

Panasonic (PCRFY)

A Panasonic (PCRFY) sign hanging in Beijing, China. generation z

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Another play on EV batteries is the Japanese company Panasonic (OTCMKTS:PCRFY). Currently, Panasonic holds a 10% share of the global market for electric-vehicle batteries, and its share of that market continues to grow. Noteworthy is that Panasonic is the main battery supplier to Tesla. The company is in the process of building a $4 billion electric vehicle battery factory in Kansas as it looks to continue supplying Tesla and other U.S. automakers.

Panasonic’s EV battery plant in Kansas is expected to create 4,000 jobs and will be the company’s second plant in the U.S. after the factory it already operates in Reno, Nevada. Panasonic has already produced more than six billion electric-vehicle battery cells, almost all of them for Tesla’s line-up of EVs. However, Panasonic recently signed a deal to also supply batteries to Lucid Group (NASDAQ:LCID), which makes a luxury electric sedan called the “Air.” Panasonic’s stock has been marching higher, having gained 30% in the last six months.

Grab it if you’re into momentum EV stocks!

Toyota Motor Corp. (TM)

Toyota (TM) logo on the building of a dealership during daylight

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Don’t sleep on Toyota Motor Corp. (NYSE:TM). The Japanese company remains the world’s largest automaker, producing some 10 million vehicles a year. Toyota is able to flex some serious production muscle when it comes to electric vehicles. And while some critics say Toyota has been slow in pivoting to electric, the company is now making up for lost time. In December 2021, Toyota announced that it would spend $35 billion in order to bring 30 electric vehicle models to market by 2030. Thus, it is one of the top EV stocks in my book.

More recently, Toyota announced plans to spend more than $5 billion to make EV batteries within the U.S. and its home market of Japan. The majority of new batteries will be built at a plant the company owns and operates in North Carolina. The sizable investments, coupled with its production prowess and economies of scale, should make Toyota a formidable player in the electric vehicle market for many years to come. TM stock has lagged over the past year, down 20% since spring 2022. Investors should buy the dip.

On the date of publication, Joel Baglole held long positions in GM and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.