(MENAFN- Daily Forex) The EV market continues to expand globally, but it has hit significant roadblocks after some governments removed subsidies, and car manufacturers scaled back their ambitious EV targets. China is driving innovation, offering more affordable cars with superior technology, and Europe is catching up with legacy brands offering EVs are EV Stocks?

EV stocks refer to publicly listed companies that design and manufacture electric cars, battery components, sensors, and autonomous driving vehicles and software. The latest addition to the group is electric vertical take-off and landing (eVTOL) aircraft manufacturers. Mining companies that extract rare earth metals vital to EVs are another way to gain indirect exposure to the EV sector Should You Consider Buying EV Stocks?

Despite the slowdown in EV adoption, EVs will phase out combustion engines and remain the future of transport. The EV sector offers exceptional growth rates, far outpacing combustion engines, and it is also at the forefront of cutting-edge technology, including autonomous driving.

Here are a few things to consider when evaluating EV stocks:

• EVs are the future of transport and will slowly phase out combustion engines.
• The EV sector grows rapidly, despite roadblocks and issues, and expectations call for an annual growth rate above 25%.
• The regulatory landscape changes but remains favorable and supportive overall.
• Many newer EV stocks have capital concerns and continuously raise capital by issuing new shares, diluting existing shareholders.
• Government incentives, like subsidies and tax credits, have driven EV growth, as selling prices are high, but those incentives have seen massive cutbacks.

What are the Downsides of EV Stocks?

EVs navigate a changing regulatory landscape, high input costs, and reduced government incentives. Selling prices are higher than comparable combustion engines, and car manufacturers have scaled back their ambitious electric vehicle plans. Not every country will adapt to EVs harmoniously, and hybrid cars have become highly popular. Competition is increasing, and capital concerns remain for many new EV companies. Valuations are often excessive, while EPS is negative.

Here is a shortlist of currently attractive EV stocks to consider:

• BYD Company (BYDDY)
• Li Auto (LI)
• NIO (NIO)
• XPeng (XPEV)
• Polestar Automotive Holding (PSNY)
• VinFast Auto (VFS)
• Tesla (TSLA)
• Rivian Automotive (RIVN)
• Lucid Group (LCID)

BYD Company Fundamental Analysis

BYD Company (BYDDY) is a Chinese vertically integrated manufacturing conglomerate. It includes BYD Auto, which manufactures EVs; BYD Electronics, which produces electronic parts and assemblies; and FinDreams, which manufactures automotive components and electric vehicle batteries. BYD is also a member of the CSI A50.

So, why am I bullish on BYDDY following its correction?

I am bullish on BYD Company for its well-diversified and integrated operations. Therefore, I rank BYDDY as my top EV pick. It is the global leader in EV production, and its reach remains unmatched. BYD Company is on track to overtake Tesla as the best-selling EV brand this year. Unlike Tesla, which gains hype for products it has not yet sold, like robotaxis and robots, BYDDY remains firmly focused on revenue-generating products that finance its future ambitions, while maintaining industry-leading operational metrics.

BYD Company Fundamental Analysis Snapshot

The price-to-earning (P/E) ratio of 62.65 makes BYDDY an expensive stock. By comparison, the P/E ratio for the S&P 500 is 30.61.

The average analyst price target for BYD Company is 18.00. This suggests excellent upside potential with decreasing downside risks Company Technical Analysis

BYD Company Price Chart

• The BYDDY D1 chart shows price action between its descending 0.0% and 38.2% Fibonacci Retracement Fan levels.
• It also shows BYD Company inside a horizontal support zone with rising breakout pressures.
• The Bull Bear Power Indicator turned bullish with an ascending trendline.

My Call on BYD Company

I am taking a long position in BYDDY between 12.06 and 12.65. BYD Company is one of the best diversified EV companies, with a growing global manufacturing footprint, and I am bullish on its expansion into high-growth markets, including Germany and Australia.

• BYDDY Entry Level: Between 12.06 and 12.65
• BYDDY Take Profit: Between 18.00 and 19.80
• BYDDY Stop Loss: Between 10.05 and 10.58
• Risk/Reward Ratio: 2.99

Li Auto Fundamental Analysis

Li Auto (LI) is a Chinese EV manufacturer best known for producing electric vehicles equipped with range-extending petrol engines. It operates 543 retail stores in 156 cities, 536 service centers, and 3,190 supercharging stations with 17,597 charging stalls.

So, why am I bullish on LI following its recent correction?

Li Auto continuously launches new EVs to meet evolving consumer trends, including a six-seat battery-electric SUV, which helps it generate free cash flow to reinvest in its business. Its technology includes the ability to recharge the battery pack with electricity or gasoline, but it launched full EVs in 2024. I view the recent correction as an excellent buying opportunity, driven by expected growth rates above 25%, and I remain bullish on its latest lineup, while debt levels are conservative.

Li Auto Fundamental Analysis Snapshot

The price-to-earnings (P/E) ratio of 17.03 makes LI an inexpensive stock. By comparison, the P/E ratio for the S&P 500 is 30.61.

The average analyst price target for Li Auto is 25.30. It suggests excellent upside potential with manageable downside risks Auto Technical Analysis

• The LI D1 chart shows price action between its descending 0.0% and 38.2% Fibonacci Retracement Fan levels.
• It also shows Li Auto inside a horizontal support zone.
• The Bull Bear Power Indicator is bearish with an ascending trendline, nearing a bullish crossover.

My Call on Li Auto

I am taking a long position in LI between 17.59 and 19.33. I am bullish on its growth potential, given low valuations and excellent operational metrics.

• LI Entry Level: Between 17.59 and 19.33
• LI Take Profit: Between 25.30 and 27.10
• LI Stop Loss: Between 15.88 and 16.71
• Risk/Reward Ratio: 4.51

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