Electric vehicle (EV) stocks have been one of the trendiest topics in the stock market. After such a monstrous run among top EV stocks, everyone wants to find the next Tesla (NASDAQ: TSLA), and that’s understandable. In 2020, many saw the next Tesla in Nio Inc. (NYSE: NIO). Many call it China’s Tesla, rightly or wrongly. In fact, the gains from NIO stock is unrivaled, where the stock surged more than 1,500% in the past year. Admittedly, its sales numbers are coming from a low base in comparison with Tesla. But the stock has been skyrocketing, nonetheless.
To capitalize on the red-hot industry, many EV companies have been going public through the special purpose acquisition company (SPACs) route. While SPACs may get a bad rap sometimes, you can’t deny that some could hold promise. Sure, as you may already know, there isn’t only one way to ride the EV boom. Beyond the electric vehicle makers, there are also pick-and-shovel plays that could do just as well in terms of returns. Operators of EV charging stations are also gaining traction. On Monday, Switchback Energy Acquisition (NYSE: SBE) announced that its registration statement relating to its merger with ChargePoint has been declared effective. Shareholders will vote on February 11 to approve the merger. It certainly seems to me that a company like Switchback is far less speculative than many other SPACs.
The potential of the EV market is enormous, to say the least. After a successful year with EV stocks in 2020, many believe this could be the start of something big. While I don’t disregard the fact that EV truly is the future, some are concerned with the valuations of big names like Tesla. Sure, the Shanghai gigafactory could ramp up production and bring up sales volume. But the price tag could still deter some investors from piling in. Perhaps, chasing TSLA stock need not be the only game in town.
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- Workhorse Group (NASDAQ: WKHS)
- Blink Charging (NASDAQ: BLNK)
- Property Solutions Acquisition (NASDAQ: PSAC)
First up the list, Workhorse Group is one of the trendiest EV stocks to watch this week. Some of you may be watching WKHS stock because of the potential deal with U.S. Postal Services. While it is no sure thing, many are aware that the company is a frontrunner in the $6 billion deal. Currently trading at $25.76 per share, the EV company has enjoyed an increase of 600% in the past year. The company focuses on manufacturing electrically powered delivery and utility vehicles. Workhorse develops electric vehicles for last-mile delivery and other commercial purposes.
The company’s C650 and C1000 step vans have a modular battery pack system. There is also a proprietary telematics system to track and monitor the performance of its EVs. Workhorse estimates that its vehicles have 60% fewer maintenance expenses compared to fossil-fueled trucks. With that, you could expect over $170,000 in fuel and maintenance savings over a 20-year life span.
Workhorse currently has 400 vehicles on the road. This number could increase significantly in the coming years. Should Workhorse be able to seal a deal with the U.S. Postal Service, the company could be a growth stock to watch in the industrial EV space. Whether this deal could actually come to fruition is anyone’s best guess. But if the company continues to work on increasing its production capabilities, it might just have a good chance of winning.
Like ChargePoint, Blink Charging is paving the way for the adoption of EVs through the deployment of charging stations globally. In 2020, only a handful can boast the same gains as BLNK stock. If you have any in mind, they would have to beat BLNK’s gains of over 2000% in one year. Just yesterday, the stock skyrocketed around 18% amid a stock offering. For starters, the company is a leading owner, operator, and provider of electric vehicle (EV) charging equipment and services. Despite its fantastic performance so far, Blink appears to be keeping up its momentum.
Recently, the company signed an exclusive seven-year agreement with Lehigh Valley Health Network (LVHN). The deal entails Blink owning and operating charging stations across LVHN’s locations. In terms of numbers, this adds up to hundreds of EV chargers across the U.S. COO Brendan Jones said, “As the EV boom continues, Blink is leveraging our relationships, such as this one with Lehigh Valley Health Network, to identify host locations that recognize the need for EV charging infrastructure as consumer demand increases. We appreciate these long-term, exclusive contracts as they allow us and the host location to add charging stations as warranted by demand.” Additionally, the deal comes with the possibility of two 7-year extensions. This could be a vital early step for the company as it seeks to raise its long-term growth potential.
The high stock price of BLNK stock may be exactly what the company needs right now. That gives the company a lot of flexibility to execute its growth strategy long term simply because it has a high stock valuation. Now that the company is issuing new stocks, the company could use the proceeds to fund growth. Blink appears to be in a prime position to facilitate rising EV trends. Does this mean that BLNK stock has room to grow moving forward? Only time will tell.Property Solutions Acquisition
Lastly, Property Solutions Acquisition is the latest blank check company that many are watching as we start the second week of 2021. You might have thought this is a real estate stock at first glance. PSAC stock surged amid a report that it could merge with electric vehicle start-up Faraday Future. According to Bloomberg, the potential merger deal would take Faraday public at a valuation around $3 billion. For this deal to happen, it appears that the SPAC has to raise roughly $400 million for the deal to go through.
If you have been following the space closely in the past few years, you would have heard of Faraday. You see, when Faraday impressed the public at the Consumer Electronics Show nearly 5 years ago, many thought that this could challenge Tesla’s position in the EV space. As impressive as the EV may be, the company’s balance sheet wasn’t solid enough to pull through. As a result, the company was heavily in debt and many of its employees left soon after.
Fast forward to today, Faraday is now led by Carsten Breitfeld, a former BMW executive. Joining him as the face of the company is Zvi Glasman, a former FOX Factory Holding CFO. The stock market seems to be overwhelmingly positive towards new EV players, from the past performance of EV stocks in 2020. While you may be excited about the news, investors should also take note that buying into rumors may be risky. Of course, if you could stomach the huge swings in stock prices and are bullish on EVs, by all means, take a chance. Otherwise, it might be better off to go with EV stocks that have a track record of showing strong delivery growth.