Electric vehicle (EV) companies are in uncharted territory. A few years ago, the market was anticipated to see a bustling demand for this new technology. However, the current reality in this market paints an unsettling picture for some in the industry. Many companies are seeing tepid demand, layoffs and the call to scale back on production. But that doesn’t mean there aren’t good picks for EV stocks to buy right now.
Companies that are surviving or thriving despite this slump are those that have diversified their offerings either alone or by collaboration with other automakers. But in some cases, a few of these companies are somehow powering through the slump and posting great sales.
Other companies’ stocks that can be described as EV-adjacent are better positioned than pure-play EV stocks at the moment.
Here are some of the best EV stocks to buy now.
Xpeng (XPEV)
With a market cap of $6.9 billion, Chinese EV maker XPeng (NYSE:XPEV) is a relatively small player in the EV market — but it is holding its own impressively and might be one of the best EV stocks to buy now.
Investor reaction was positive after the company turned a profit for Q1 and issued an optimistic guidance for second-quarter car sales. Xpeng’s vehicle margin — a key profitability metric, jumped over eight percentage points in the first quarter. The company expects to sell at least 25% more units this quarter compared to last year.
Also, Xpeng is making more money per car and selling more cars overall. Its average revenue per vehicle shot to $42,000, thanks to strong sales of the X9 model. This helped push gross margins up to 13% — a significant improvement from the previous year.
This success is partly due to its doubled revenue stream from technical services, such as its partnership with Volkswagen (OTCMKTS:VLKAF). Xpeng now expects to ship between 29,000 and 32,000 cars this quarter — which is a year-over-year (YOY) increase of up to 38%.
General Motors (GM)
Shares of General Motors (NYSE:GM) are up over 30% this year, which is a rarity if we’re looking at other big players in the U.S. auto market. Tesla (NASDAQ:TSLA), Ford Motors (NYSE:F) and Rivian (NASDAQ:RIVN) have not seen nearly that level of success.
General Motors posted strong financial results for quarter one of 2024, with a profit of $2.97 billion, exceeding analyst expectations. Revenue also grew by 7.6% YOY — reaching just over $43 billion and surpassing analyst predictions of $41.15 billion. Earnings per share came in at $2.62, which significantly topped Wall Street estimates of $2.13 per share.
And while other companies, such as Ford, are pivoting to hybrid cars thanks to a cooling in demand for their EVs, GM expects to ramp up production of its all-electric vehicles. The company is on track to produce between 200,000 to 300,000 units this year.
It also helps that GM shares have an overweight analyst recommendation per MarketWatch, which signals it’s a good bet among EV stocks to buy this June.
Onsemi (ON)
Due to the overall decline in EV stocks in recent years, some investors are looking to dip their toe into the next best thing in the EV space: semiconductors for the auto industry.
Onsemi (NASDAQ:ON) supplies semiconductors and sensors for the automotive industry, and is one such company benefiting from this phenomenon. Shares rose in April after the Scottsdale, Arizona-based EV chips provider posted better-than-expected results for the first quarter.
What’s more, ON is profitable. Its price shot by over 50% in the first three quarters of last year, unlike many pure-play EV stocks. Revenue in 2022 jumped 24% to $8.33 billion.
Also, while the overall stock market took a beating in 2022, ON was relatively unscathed. Its stock value dipped just 9%, compared to the Nasdaq tanking 33% during the same period.
Currently, analysts are generally bullish on Onsemi, with 18 “buy” and 13 “overweight” ratings and only one “sell” rating. For investors looking for an alternative to pure-play EV stocks, ON is one of the best stocks to buy now.
On the date of publication, Hope Mutie did not have (either directly or indirectly) any positions in the stocks mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com’s Publishing Guidelines.