Electric Vehicle (EV) demand in the U.S. faces headwinds from high interest rates and a growing preference for hybrid vehicles among consumers. Yet, Barron’s reports a steady increase in EV sales year-over-year, with EVs capturing a 7% share of the total U.S. auto market in Q1. Recent hikes in oil prices and anticipated rate cuts by the U.S. Federal Reserve are expected to fuel future demand for EVs. While the U.S. EV market may be experiencing a temporary slump, there are prime opportunities for savvy investors to capitalize on.
On the contrary, the EV landscape appears more promising in China, where the China Passenger Car Association foresees a 33% year-on-year surge in combined sales of EVs and plug-in hybrids in March. For investors eyeing the continuous growth of EV sales, here are three stocks presenting appealing prospects amidst the current EV demand slowdown.
Rivian (RIVN)
U.S.-based EV startup Rivian (NASDAQ: RIVN) has formed a strategic partnership with a major player in commercial vehicles, JB Poindexter & Co., to develop an electric delivery van using Rivian’s chassis and batteries. This van is slated for use by Canada’s postal service for mail delivery, potentially opening avenues for Rivian to secure significant revenue through collaborations with renowned delivery firms such as FedEx and UPS. The partnership’s success could translate into substantial growth for Rivian by tapping into the burgeoning electric delivery vehicle market.
EVgo (EVGO)
While EV sales growth in the U.S. has shown signs of deceleration, certain automakers are experiencing remarkable expansion. This trend bodes well for EVgo (NASDAQ: EVGO), a prominent provider of public EV chargers in the United States. Notably, Hyundai, Ford, and BMW witnessed impressive year-over-year surges in U.S. EV sales last quarter. The accelerated growth of specific EV brands suggests an overall uptick in EV market demand, signaling a promising future for EVgo as more electric vehicles hit the roads, necessitating increased utilization of its charging infrastructure.
Xpeng (XPEV)
Chinese EV manufacturer Xpeng (NASDAQ: XPEV) is capitalizing on the robust Chinese EV sector by registering a 20% increase in deliveries last quarter compared to the previous year. Noteworthy is Xpeng’s sophisticated Advanced Driver Assistance (ADA) system, with an impressive 82% monthly active user penetration rate in urban driving scenarios. The widespread adoption of Xpeng’s ADA signifies its user-friendly and practical appeal. The collaboration between Xpeng and Volkswagen is poised to enhance the former’s market credibility in Europe and China, leveraging Volkswagen’s strong brand presence across these regions. The joint launch of two new EV models in 2026 further indicates promising prospects for Xpeng.
On the date of publication, the writer held long positions in RIVN, EVGO, and XPEV. The opinions expressed in this article solely belong to the writer.
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