NEW YORK, NY - November 30, 2023 - The green stock market, including major players like Tesla, is facing a downturn that could extend into its fourth consecutive year in 2024. Bloomberg’s Markets Live Pulse survey indicates a persistent negative sentiment, with Tesla at risk of losing its spot among the S&P 500's top 10 companies. Nearly two-thirds of respondents plan to avoid the electric vehicle (EV) sector, and more than half foresee a further decline in the iShares Global Clean Energy ETF.
This bearish outlook is influenced by higher interest rates, political challenges in the US, and evolving regulations that could expose greenwashing practices. Sustainable investor Chat Reynders describes the current phase as a pivotal moment for the green industry, noting a shift away from purely climate-change-focused investments towards more traditional financial metrics.
However, long-term perspectives on green investments remain optimistic. Experts like Garvin Jabusch and Brent Newcomb view the current downturn as a temporary shift or even a buying opportunity, especially in utility stocks. Bill Green emphasizes the overreaction of public markets to rising interest rates and supply chain issues, arguing that this does not indicate a halt in the energy transition.
The EV sector, particularly Tesla, exemplifies these challenges. Despite an initial surge, Tesla's value has dropped significantly, with investor concerns heightened by CEO controversies and broader market trends. However, the urgency of climate change continues to drive investment towards greener technologies.
Amid this backdrop, Lucid, another EV start-up, faces its own struggles. Analyst Chris Pierce downgraded Lucid stock due to concerns over demand, despite acknowledging its technological edge and the potential of its new Gravity SUV. Lucid’s high-range technology and strategy to license it to other EV makers have failed to bolster investor confidence, and the company's stock value has plummeted.
In response to these market dynamics, PRISM MarketView has identified three EV stocks that appear resilient enough to withstand the ongoing sell-off in the sector. These selections reflect a deeper analysis of the EV market, recognizing potential despite the current challenges.
GreenPower Motor Company, Inc.
GreenPower Motor Company is a manufacturer of electric buses and commercial electric vehicles. Based in Canada, GreenPower focuses on developing and producing environmentally friendly transportation solutions to address the growing demand for sustainable and zero-emission vehicles.
In the past month, the company announced positive news contributing to the increase in share price. For the first half of fiscal year 2024, reported revenues were $26M, a 125% increase, from the previous year. Additionally, the company expanded its dealer relationships, increased its cash position and secured additional school bus orders, including 35 Type D all-electric, purpose-built school buses for the California market.
Up nearly 60%, GreenPower’s stock is the YTD leader in the PRISM MarketView Emerging EV Index. The company’s share price is $2.76, at the lower end of its 52-week range, which potentially could suggest the stock’s ability to continue its upward trend.
EVgo operates a network of fast-charging stations for electric cars, allowing EV owners to charge their vehicles quickly and conveniently. The company's charging stations are strategically located in urban areas, along highways, and at key destinations.
In their latest financial release, EVgo reported revenue growth to $35.1M for the third quarter, an increase of 234% year-over-year. In addition, its third quarter network throughput reached a record 37 gigawatt-hours ("GWh") and over 106,000 new customer accounts were added in the third quarter, resulting in a total of more than 785,000 accounts. Additionally, the company recently partnered with Hertz in a joint promotion that will offer one year of special charging rates to drivers renting any EV model at a Hertz location across the country.
The company has a share price around $3.18, which is closer to the lower end of its 52- week range ($1.88 - $8.16), and a market cap of $900M. While the company is down ~26% for the year, shares have risen 45% in the past month which could partially be attributed to the recently reported positive news.
Arcimoto focuses on developing and manufacturing small, electric vehicles. The company is known for its distinctive three-wheeled vehicles, often categorized as electric motorcycles or "fun utility vehicles" (FUVs).
The company’s last quarterly report produced solid results that indicated improvement in operational efficiencies, in addition to an increase in revenues. Arcimoto also announced plans to sell its U.S. manufacturing facility contingent on a lease agreement. Their intention for the sale is to keep areas needed for manufacturing while freeing up capital locked up in the factory's equity. Most recently, Arcimoto entered into a contract agreement with MOBIUS.energy Corporation to build battery packs for the aviation market.
While the EV market is facing challenges and the company’s stock trades around $1.00 with a market cap of $9.3M, Arcimoto might be in a better position than other EV focused stocks due to its small utility vehicle concentration. Consumers may be more inclined to buy electric FUVs instead of an electric car. Additionally, their recent agreement and entrance into aviation battery packs may diversify their business and create additional revenue-generating opportunities.
The PRISM MarketView Emerging EV Index will continue to track the latest movement and momentum among the small and micro-cap stocks contributing to this critical market.
About PRISM MarketView:
Established in 2020, PRISM MarketView is dedicated to the monitoring and analysis of small cap stocks in burgeoning sectors. We deliver up-to-the-minute financial market news, provide comprehensive investor tools and foster a dynamic investor community. Central to our offerings are proprietary indexes that observe emerging sectors, including biotech, clean energy, next-generation tech, medical devices and beyond. Visit us at prismmarketview.com and follow us on Twitter.
PRISM MarketView does not provide investment advice.
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