Tesla and more: Goldman Sachs names 10 electric vehicle stocks to buy right now

Published Sun, Jul 25 20217:30 PM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Analysts at Goldman Sachs have picked multiple stocks to play the electric vehicle "mega trend," including U.S., Chinese and European electric vehicle (EV) and battery companies. Goldman raised its electric vehicle sales forecasts by "around 20%" for the next 20 years in a note dated July 21. It now expects around 74 million of the vehicles to be on the road by 2040. Western Europe is likely to see the fastest take up of EVs in any region, the bank said, due to new EU proposals to allow only passenger cars that are zero-emission to be sold from 2035, a target it announced on July 14 . In the U.S., President Joe Biden plans to allocate $174 billion in funding for electric vehicles, while the Clean Energy for America bill could provide up to $12,500 in tax credits for those buying them. The bank forecast that the percentage of new vehicles sold that will be electric in 2040 will be 80% in Japan, 75% in the U.S. and 68% in China. Given Europe's zero-emission target, Goldman expects all new cars sold in Europe to be electric by this point. Stock picks Goldman is buy-rated on Tesla with a 12-month price target of $860. The stock closed at $643.38 on Friday. "We believe that the company will generate strong revenue growth and margin expansion over the intermediate and longer-term driven by a rapidly growing EV market, where we believe Tesla has a strong leadership position," the analysts wrote. Chinese firm BYD is also buy-rated by the bank, which described the company as having a "unique business combination," being China's No. 1 EV maker and No. 2 battery maker by sales volume. It puts the Hong Kong-listed stock's upside potential at 47.4% over 12 months. VW is a pick for the bank, whose analysts like its increasing production of battery electric vehicles (BEVs) and partnership with U.S. firm Gotion to produce batteries in Europe, as well as extension into autonomous vehicles and fleet management. "We continue to like Volkswagen given its leadership in electrification and remain Buy rated with 42% upside to our €295 [$347] Price Target," the analysts wrote. Japanese firm Toyota aims to sell 2 million electric vehicles in 2030 and will "substantially" increase battery procurement by the same year, Goldman said. It likes the company for its large cash reserves, which mean it can "quickly allocate resources needed should EV demand accelerate." It said the stock has a potential upside of 21.6% over 12 months. Other buy-rated companies on Goldman's list of "Companies supporting EV" included automakers Daimler , GM and Honda , while in battery cells it chose Samsung SDI . Battery component makers Goldman favors include European firm Umicore and Japanese company Nippon Carbon .

A Tesla store in Beijing, China, on July 4, 2021.

Costfoto | Barcroft Media | Getty Images

Analysts at Goldman Sachs have picked multiple stocks to play the electric vehicle "mega trend," including U.S., Chinese and European electric vehicle (EV) and battery companies.