Top 5 Electric Vehicle (EV) Stocks By Market Cap in 2021 | Best Electric Cars Stocks
Top 5 Electric Vehicle (EV) Stocks By Market Cap in 2021


We have listed the top 5 electric vehicle (EV) stocks by market cap. We created curation based on three categories, such as electric vehicle manufacturing stocks, lithium-ion battery manufacturing stocks, and electric vehicle charging infrastructure stocks.

Hey friends! All of you are really interested in electric vehicles. You all want to know about it because everyone talks about it. You want to know the opportunities and challenges of this industry in the future. Apart from this, you want to know directly / indirectly about companies associated with EV segment.

We will discuss this topic in detail so after this article you have complete information about 5 stocks trading on electric vehicles or companies or market and focus on EV segment.

 

Top 5 Electric Vehicle (EV) Stocks

India's auto industry is the 4th largest in the entire world. India's auto industry is expected to move from the 4 largest to 3G by the end of 2021.

In addition, the auto industry contributes 7.1% to India's total GDP. The National Mission Plan for Electric Mobility 2020 is a research report that tells us that currently, two wheelers dominate India's total auto industry. It contributes 75% of the total volume. Furthermore, it is believed that passenger vehicles dominate India's car market. As the income of people is increasing, according to this report the demand for passenger cars is expected to increase further.

Next, I will talk about electric vehicles. Electric vehicle sales accounted for less than 1% of the auto sector's total sales. But some experts say that this number will increase from 1% to 5% in the coming time. But this is an expectation. This is not a fact, however. In the coming times, we will know how this percentage will improve further. 5 lakh two-wheelers currently operate in the EV category in India. But the number of electric cars has not reached millions yet. Their number is in thousands.

 

Electric Vehicle (EV) Challenges

Now let us talk about some important things for you to understand - the challenges of the electric vehicle segment that can be expected to overcome in the future.

The first challenge for this industry is charging infrastructure. Cars will be built, people will buy them as well, but with non EV cars, you stop at a petrol pump to add fuel. But in the case of electric vehicles, the charging infrastructure has not developed at a sufficient level. This is a challenge for the industry.

In the coming times, we will see how this infrastructure will develop. Some companies have started working on this problem. The names of these companies are - Tata Power and NTPC.

The second challenge for this industry is upfront costs. Suppose you go to buy a car. You will get a diesel / petrol car for Rs. 5 lakhs. But in the electric segment the same car will be for 10 lakhs. Customers here will worry about their money being included. This is a challenge for the electric vehicle segment.

In terms of battery, the upfront cost is quite high. Therefore any electric vehicle increases the upfront cost for the buyer. Also, when you buy a car, the component is very important to you. We still rely heavily on the import of components in the electric vehicle segment. Their construction has not reached a reasonable level.

These are some of the challenges for the entire EV segment that I discussed. But opportunities outlast the challenges. These companies can overcome these challenges and achieve demand in the industry through various opportunities in emerging times.

 


Demand for Electric Vehicles (EV)

The first demand driver for an electric vehicle is government purchases. It can be a game-changer for demand and industry. It was expected that the government could change its policy and focus on four-wheel electric vehicles (as the national level / other governments started purchasing in the case of electric buses) as a result of which large demand could be boosted. Can. In addition, many large companies in India operate like taxi services.

If they concentrate / buy for growth in electric segment then demand can be made from here. You will know this in the coming times. This is a possibility that I wanted to share.

The second demand driver runs out of challenges. Believe that great technology arrives in the future that reduces upfront costs or the development of charging infrastructure. This could boost personal consumption of EVs in the coming years. This may increase demand.

The next demand driver for the EV segment may be strict emission norms. Due to this, various companies manufacturing cars had to undergo a lot of changes. This increased their cost of production.

In the coming years, as the emission norms tighten, demand for EVs will automatically increase.

This is followed by the government's FAME2 scheme. Under this initiative, the government has brought Rs 10,000 crore to use for electric vehicles such as purchasing, charging infrastructure, etc. The move by the government is an indication that there may be a lot of traction for electric vehicles.

 

According to MarketWatch's report, charging infrastructure could see a 40% CAGR growth over the next 5-6 years. The government can support organizations in various ways that are developing charging infrastructure. So it was information about the whole industry, electric vehicles where I told you about the challenges and opportunities / demand drivers.

Best electric cars stock

Now, let's move to the second part of the article, where we will discuss 5 stocks that are directly / indirectly related to this industry. These 5 stocks are divided into three categories by me.

 

The first category consists of auto manufacturing companies that produce EV vehicles.

 

The second category is the lithium-ion battery manufacturing companies (as I told you that the upfront cost of EVs is quite high due to the battery).

 

The 3rd division is the company that runs its business in EV charging infrastructure. Without giving much time, let's talk about 1 share.

 

Mahindra & Mahindra

Mahindra & Mahindra is the first company to manufacture EV / expand in this space. It is a vehicle manufacturing company in India with a well-spread business in various sectors. This company makes passenger vehicles and tractors. In recent times, the company has given remarkable returns to its investors.

The passenger segment of India, as I told you in the beginning, dominates the automobile sector. Mahindra & Mahindra has a 7.1% market share in this segment. Furthermore, the company is considered to be a leader in the EV segment as it brought its first EV car in 2001. Its name was Mahindra Reva. So you can understand that this company started focusing on EV much earlier. In recent times, the company has opened its R&D center in Bengaluru, with a large-scale focus on EV manufacturing.

 

Not only Reva, but Mahindra & Mahindra manufactures 5 other electric vehicles. In recent times, the company has also launched eVerito which is commonly seen in taxis. Recently this car has been decently successful. In addition, the company has announced other cars at the Auto Expo that could operate in the EV segment.

 

To perform well in the EV segment, the company is trying to form a strategic alliance with global manufacturers. This company has started negotiations in this regard. We will update you if there is any major development in this regard.

 

Mahindra & Mahindra has a share price of about Rs. 36. It has a market capitalization of around Rs 9,000 crore. In the last year, Mahindra & Mahindra has given 40% returns to its investors.

 

I will not talk about the P / E ratio of this company as it has been making losses in the last 12 months. We will update you periodically with the performance of the company. In the last year this company has given tremendous returns to its investors. Mahindra & Mahindra has a debt-equity ratio of about 1.76.


Tata motors

The other company is Tata Motors. Whenever we talk about EV segment its name emerges. Tata Motors has a total stake of 4.8% in the passenger segment. Although this company has recently recorded a loss, in recent times the shares of this company have given excellent returns to its investors.

I have told you about Tata Motors earlier also. This is a huge dependency revenue on Jaguar and Range Rover. For this you can watch our other videos. But an interesting point here is that Tata Motors' November sales saw a jump of 108%. In the EV segment, Tata Motors is a new entrant after Mahindra & Mahindra.

Its major focus is electric buses. The government started buying into this space. In the passenger segment, Tata Motors offers 3 EV cars such as the Tigor, Tiago and Nano. These are the three EV variants that you can buy. Apart from this, Tata Motors has a big focus on electric buses. It is expected that there will be a demand of 4 lakh buses in the coming time.

This is just an expected number where Tata Motors has a lot of attention. Here you will want to know the last three quarter sales of three Tata Motors EV cars in the passenger segment. EV sales in the first, second and third quarters were 300, 500 and 800 respectively. The number is expected to increase from 800 to 1,400 in the fourth quarter. The current share price of Tata Motors is Rs. 83. The market capitalization of the company is about Rs. 60,000 crores.

The previous one-year return of this company was negative 0.33% for investors. Tara Motors has a large debt, as it has a debt-equity ratio of about 2.2.

 

 


lithium ion batteries

The second category of stock comes in the battery segment. The name of this segment is lithium-ion battery. These batteries are used in EVs.

 

 

Amara Raja Batteries

I will talk about two companies that manufacture these batteries / will in the future. The first name is Amara Raja Batteries. This company makes lead-acid batteries that are widely used. These batteries are mainly used in industries. In addition, they are used in automobiles. The major areas where Amara Raja's batteries are supplied are telecommunications, railways, solar, etc.

 

Automobile sector replacement batteries have not seen much growth recently. But recent times have seen a pick-up in the automobile sector. This may expand demand. Take me to my screen quickly. I will show you estimates of replacement batteries according to the Society of Indian Automobile Manufacturers (as estimated by Nomura)

 

In 2016, approximately 16.3 million replacement batteries were used. This number increased to 20.3 million in FY 2019. This number was 22.2 million in FY 2020 and the number is expected to be 23.5 million in FY 2021. So it was a discussion about lead-acid batteries. But as I told you that this company can manufacture lithium ion batteries in the future. Hence this company has set up its production plant in Andhra Pradesh. In addition, the company is working towards technology with IIT-Chennai. The share price of Amar Raja's battery is about Rs 987. The market capitalization of this company is around Rs 1,6,000 crore. In the last one year, it has given over 30% returns to its investors.

 

The Amar Raja battery has a P / E ratio of 30. The P / E ratio of the industry is 46. This company is virtually debt free. An interesting fact is that in the last 5 years its revenue and profit growth of CAGR is above 10%.


Exit industries

Now let's talk about the fourth company on the list. It works directly in the lithium ion field. The name of this company is Exide Industries. This company manufactures lead-acid batteries that are used in various industries and the automobile sector. This company has another life insurance business. It is included in this company. Now let's talk about Exide's revenue breakup. As you can see on my screen the revenue breakup of Exide Industries is visible.

 

73% of its revenue is contributed by the automobile sector. Major revenues are then contributed by industries with a 26% share. Exide has entered into a strategic alliance (joint venture) with the Swiss company at a ratio of 75:25. This company has set up a plant in Gujarat in this regard.

 

They will manufacture lithium-ion batteries in the future. CAGR growth is 9% of the total revenue for this company. While its net profit has increased by 5% compared to the Amar Raja Battery, which has shown 10% CAGR growth in the last 5 years. The current share price of Exide Battery is Rs. 93. It has given positive 7% returns to its investors in the last one year. The company has a market capitalization of Rs 1,6,000 crore.

 

The P / E ratio of this company is around 27. While the P / E ratio of the OEM industry is 46. In comparison, the company's P / E ratio is low. The P / E ratio of this company is slightly lower than the P / E ratio (30) of Amar Raja Battery. The debt-equity ratio is 0.07. Debt on the company is negligible. So this was the discussion regarding the battery.

 

Tata power

Now let's talk about the third category. Here we will talk about today's 5th stock.

 

Infrastructure is the name of this industry. If electric vehicles do a good job in the future, then Tata Power will take the lead in developing charging infrastructure.

 

It is the largest integrated power company that runs a power generation, transmission business. In recent times, the company has shifted its focus towards charging infrastructure. The power generation of this company is 10,875 MW. Out of this, 32% generation is from clean energy i.e. solar, wind etc.

 

In relation to the EV charging infrastructure, this company has created 170 charging points. In the future, the company is looking to expand it. Another interesting thing about this company is that it has signed MoUs with petrol pump companies. Here I have used the term petrol pump as you can relate to it. As you have to go to the petrol pump for fuel, if you get the charging infrastructure right there, then the problem of EV vehicle charging will be solved.

 

After this Tata Power has signed MoUs with IOCL, HPCL, etc. which operate petrol pumps in India.

 

The current share price of Tata Power is Rs.3. In the last one year this company has given a spectacular 47% return to its investors.

 

So in this article we talked about the EV segment and its 5 stocks.

 

Comment below your favorite of these stocks where you are thinking of investing.

 

Also provide your reasons for commenting so that our audience learns from your commentary and we can build a community where we learn from each other.

 

 

Happy investment!
 

We make all articles for educational purposes. We do not offer any buy / sell recommendations. Do your own research before investing in any stock and then make long term investments

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