Amidst the current crisis lies a hidden opportunity in the world of EV stocks – the potential to soar once again. The looming specter of the Federal Reserve cutting interest rates offers a glimmer of hope for EV companies beleaguered by sky-high borrowing costs. As interest rates begin to fall, there exists a tantalizing prospect of sales rebounding.
One of the primary obstacles impeding the widespread adoption of electric vehicles is the inadequate EV charging infrastructure. Surveys suggest that over half of Americans harbor concerns regarding this infrastructure deficiency. Nevertheless, with increased investment in this sector, the road to broader EV adoption could soon be paved.
Furthermore, the current downtrend seen in many top EV stocks presents a golden opportunity for investors to seize these stocks at bargain prices. In the timeless words of Baron Rothschild, now is the moment to “buy the blood in the streets, even if the blood is your own.”
With the imminent potential of the Federal Reserve reducing rates and a promising future for EV charging infrastructure, the stage is set for a resurgence in EV sales. For now, it is prudent to invest in these promising names at discounted rates and await the inevitable upward trend. Here are three EV stocks poised for a potential comeback.
Tesla (TSLA)
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Currently trading at $180.01, Tesla (NASDAQ:TSLA) finds itself technically oversold at double-bottom support levels from May. Emerging from over-extensions on RSI and MACD, a potential retest of $260 in the near future seems likely.
Recent developments such as the announced price hike for its Model Y and a $320 price target from Morgan Stanley add credence to Tesla’s potential upside. Despite underwhelming fourth-quarter earnings, the negativity surrounding Tesla has been factored into its current price. Noteworthy is Cathie Wood’s ARK funds recently acquiring 116,408 shares of TSLA.
Li Auto (LI)
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Despite a recent plunge from $46 to $30.19 due to lowered delivery estimates, Li Auto (NASDAQ:LI) now appears oversold on various metrics, signaling a potential uptrend. Each time RSI, MACD, and W%R align in oversold territory, LI has displayed a robust bounce back.
Analysts at Bank of America reiterated a “Buy” rating with a $57 price target post the fourth-quarter earnings report, which showcased a 136% revenue surge and a notable increase in gross profit margins to 23.5%.
Global X Autonomous & Electric Vehicles ETF (DRIV)
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For investors seeking broader exposure to a basket of robust EV stocks, there is the Global X Autonomous & Electric Vehicles ETF (DRIV) (NASDAQ:DRIV). With investments in 45 companies associated with autonomous vehicle tech and EV development, this ETF offers diversification and potential growth.
Currently priced under $25, the DRIV ETF has been on an upward trajectory post its bottom, showing promise of retesting $27.50 in the near term. The appeal lies in its affordability, allowing investors exposure to multiple top EV stocks at a fraction of the cost compared to individual investments.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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