Wedbush Securities has named four stocks that it believes could benefit from the growing adoption of electric vehicles, with all of them being rated outperform by the investment firm. Global EV adoption will grow to 30% by 2030, up from just 5% in 2022, analyst Dan Ives said in a note on Dec. 23, describing the current EV revolution as the "biggest transformation to the auto industry since the 1950s." This "$5 trillion market opportunity over the next decade" will benefit a raft of companies, Ives added, with EV behemoth Tesla likely to own half, or $2.5 trillion, of this pie. "We differ from some in that we do not view the EV industry as a "zero sum game" (Tesla vs. others), instead our analysis indicates there will be a slew of winners in this green tidal wave and investors can play many aspects of this massive market opportunity over the coming years," Ives said. Tesla's share price has been under pressure since CEO Elon Musk began offloading part of his holdings in the company, with the stock tumbling nearly 10% since his infamous Twitter poll on Nov. 6 . But Ives believes that the "selling stock narrative" is now in the "rear-view mirror," with focus now shifting back to the company's growth story. "The linchpin to the overall bull thesis on Tesla remains China, which we estimate will represent 40% of deliveries for the EV maker in 2022. With demand robust globally and the new factories in Austin and Berlin set to launch in early 2022, Tesla has strong momentum into 2022 that we believe should drive the stock," Ives said. The bank has forecast year-on-year growth of 50% for Tesla in 2022 and has a price target of $1,400 on the stock — an implied upside of 39% to the stock's closing price of around $1,008 on Dec. 24. Electric vehicle start-up Rivian is another stock favored by Wedbush, with the company expected to create a major brand within the EV market over the next decade, Ives said in a separate note on Dec. 13. The investment firm said that the company is in a "very strong competitive position on the EV consumer luxury front," with pre-orders of nearly 150,000 vehicles across its platforms. The company also counts Amazon and Ford as major investors. "With the popularity and consumer demand for EVs on the trucking/SUV market, we believe Rivian is in the catbird's seat to take considerable market share in this EV arms race under its visionary CEO and founder RJ Scaringe," Ives said on Dec. 17. Wedbush has a price target of $130 on the stock, which closed at around $96 on Dec. 24, representing a potential upside of 35%. Vehicle data start-up Wejo is expected to be a "major player" in the connected vehicle data market, particularly as a new generation of electric vehicles emerges, Wedbush also said on Dec. 21 as it initiated coverage on the stock. The company's cloud technology enables vehicle-to-vehicle communication — a critical element for autonomous vehicles and EVs, Ives noted. The company has forecast 124 million vehicles on its platform and revenue of $764 million by 2025, up from just 11.9 million vehicles on the platform currently. Wedbush has ascribed a price target of $10 on the stock, which represents an implied upside of 35% to its closing price of around $6.50 on Dec. 24. Auto giant General Motors is another of the firm's picks. Ives believes that the company will convert 20% of its customer base to EVs by 2026, and more than 50% by 2030. Overall revenue is also set to double by 2030, Ives added. The bank has a price target of $85 on the stock, which closed at $56 on Dec. 24 — an implied upside of 52%.
Electric vehicles have been in focus amid the green transition.
Caroline Brehman | CQ-Roll Call, Inc. | Getty Images
Wedbush Securities has named four stocks that it believes could benefit from the growing adoption of electric vehicles, with all of them being rated outperform by the investment firm.