Excited About Tesla? More EV Stocks to Consider Today

Tesla has generated hype as an EV stock over the past year. Can stocks like Lithium Americas Corp. (TSX:LAC)(NYSE:LAC) follow?

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The electric vehicle (EV) market was thrust into the mainstream during the 2010s. This subject has been widely discussed for decades, but last decade was a huge leap for fossil fuel alternatives. One of the most influential success stories has come in the form of Tesla, spearheaded by its charismatic and controversial founder Elon Musk. Today, I want to take a brief look at Tesla and look at more EV stocks worth considering in the Canadian market.

Tesla’s success is just the tip of the iceberg for the EV market

Tesla stock has climbed 341% year over year as of late morning trading on May 5. The stock had been a volatile and frustrating hold for the latter half of the 2010s. Indeed, Tesla held the dubious honour as one of the most shorted stocks in North America. The company suffered from production setbacks and Elon Musk had drawn the ire of the SEC for his public statements.

In the first quarter of 2021, Tesla delivered 184,400 vehicles and produced 180,338 cars. Still, part shortages and retooling preparations led to a pause on production of the Model X or Y. The company still had to lean on energy credits and bitcoin sales to generate a profit in Q1 2021. Tesla is well worth watching in the months ahead, but I have my eyes on other EV stocks on the TSX today.

Why lithium stocks are on the rebound

Expectations for the EV market drove a gold rush in the lithium space in the latter half of the 2010s. However, this would sputter out before the end of the decade. The beginning of this decade has seen many top auto manufacturers enter the EV market. Increased demand is fueling a rush back into lithium stocks.

I suggested that investors should look at Lithium Americas (TSX:LAC)(NYSE:LAC) in early April. Shares of Lithium Americas have dropped 4.8% in 2021 so far. The stock is up 271% year over year. In 2020, it made strong progress on its lime plant, solvent extraction plant, and lithium carbonate plant. Moreover, it expects first production in the middle of 2022.

This top Canadian auto parts manufacturer is boosting its EV market footprint

Magna International (TSX:MG)(NYSE:MGA) is a North American auto parts manufacturing giant. Its shares have increased 29% in 2021. The stock has climbed 126% from the prior year.

In late 2020, Magna announced that it would form a joint venture with LG Electronics to construct electric vehicle components. This powered the stock to an all-time high before 2020 came to an end. The joint venture will include over 1,000 employees at LG locations in the United States, South Korea, and China.

Magna boasts an excellent balance sheet and the stock is trading in favourable territory relative to industry peers. This is an EV stock that is already well established as an auto parts manufacturing beast.

The Canadian Tesla? Not so fast . . .

In late April, I’d discussed whether Facedrive (TSXV:FD) had the potential to be the Canadian Tesla. Facedrive stock has thrived on the back of hype for its foray into the EV market. Its shares have climbed 265% from the prior year. Unlike Tesla, it has not been able to lean on a cash trove and crypto to give it a boost as profits elude the company.

Moreover, it is facing stiff competition in the rideshare space as companies like Uber and Lyft are already well established in Canada. Both are also moving to offer EV alternatives to their customers.

Facedrive is the EV stock I’m less inclined to snatch up after its remarkable run over the past year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. David Gardner owns shares of Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool recommends Magna Int’l and Uber Technologies.

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