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Forget Tesla: 2 EV Stocks I’d Buy Instead

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The electric vehicle (EV) market made huge strides over the course of the 2010s. Analysts expect that there will be millions more EVs on the road by the end of this decade. Investors should be targeting stocks that are poised to benefit due to these trends. Tesla (NASDAQ:TSLA) has made its bones in this space, and its stock has soared on the back of high expectations. However, I’m looking to duck Tesla and focus on different EV stocks on the TSX in July.

Here’s why I’m not interested in Tesla stock this summer

Shares of Tesla hit an all-time high of US$900.40 in the beginning of 2021. However, the stock has plunged 19% over the past six months as of close on July 12. Tesla co-founder Elon Musk thrust himself into the cryptocurrency conversation in the first months of 2021. His company was able to make a quick profit after dipping into the top digital currency in February.

Musk now finds himself in court in order to defend the company’s 2016 acquisition of SolarCity. The lawsuit filed by union pension funds and asset managers alleges that Musk forced Tesla’s board of directors to okay the $2.6 billion all-stock deal. If the court concludes that the deal was unfair to shareholders, Tesla could be in store for more volatility.

This EV stock has a lot of room to grow in the 2020s

Magna International (TSX:MG)(NYSE:MGA) is an Aurora-based company that designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for vehicle manufacturers of vehicles and light trucks. Shares of Magna have climbed 26% in 2021 as of close on July 12. The stock is up 80% year over year. Why does Magna qualify as an EV stock?

In the mid-2010s, Magna began to aggressively pursue EV parts manufacturing. Late last year, the company announced that it would form a joint venture with LG Electronics to build electric car components. In April, Magna announced that it was planning to expand its global manufacturing capacity in North America. This is part of a drive to bolster EV production.

Its foray into the EV space is not the only promising development for Magna. It reported sales growth of 18% in its most recent quarterly report. Moreover, global light vehicle production was up 18%. This was powered by an 87% surge in China. Shares of Magna last had a price-to-earnings ratio of 24. This puts it in solid value territory relative to the industry average.

Another EV stock on the TSX worth getting excited about

GreenPower Motor (TSXV:GPV)(NASDAQ:GP) is the second EV stock I want to focus on today. This Vancouver-based company fabricates models of high-floor and low-floor electric vehicles. Its shares have plunged 41% in 2021 as of close on July 12. However, the stock is still up 278% year over year.

The company unveiled its fourth-quarter and full-year fiscal 2021 results on June 29. Revenue rose 76% from the prior year to $4.37 million in Q4 F2021. Meanwhile, its inventory nearly doubled compared to the same time last year. This EV stock has dipped sharply in 2021 and is worth buying on the dip, as it gears up for long-term growth.

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 stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool recommends Magna Int’l.

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