1 Top TSX EV Stock Investors Shouldn’t Sleep On Right Now

Here’s why investors looking for a cheeky EV stock that isn’t insanely overvalued may want to take a look at Martinrea (TSX:MRE) right now.

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For growth investors, the electric vehicle (EV) space is one that’s been a go-to in recent years. Of course, owning one of the top EV brands or auto manufacturers expanding into EVs is one thing. However, playing this sector from other angles is what I’m interested in. Accordingly, there’s one EV stock on my radar right now.

The thing is, this isn’t really an EV stock. Martinrea (TSX:MRE) is really an auto parts company. Indeed, the company’s focus on various metal parts, fluid management systems, transmissions, casings, hoses, assemblies, and the like is great. The problem is, a lot of these parts are geared toward traditional internal combustion engines.

Accordingly, this is one of the stocks that one might argue is the furthest thing from an EV play. However, there’s one catalyst I think has the potential to take Martinrea into the future.

Let’s discuss.

VoltaXplore deal makes Martinrea a potential EV stock

One of the good things about EVs is, there are fewer parts. Besides some electric motors, a whole lot of computing power and wires, there’s really not much to the vehicle. Forget about the transmission, oil system, and most parts of the internal combustion engine (ICE).

That’s great for EV owners, but clearly not so great for Martinrea.

The thing is, the company is making inroads into the EV battery-making space. Via a joint-venture deal with NanoXplore, Martinrea is set to become a leading player in this space. The joint venture, name VoltaXplore, has garnered a lot of media attention of late for good reason.

EVs still require parts, though they’re very different from the kinds of parts Martinrea provides. By utilizing a joint-venture structure, investors bullish on Martinrea transitioning toward an EV-friendly business model quicker have something to cheer.

Sure, traditional ICE vehicles will be around for some time. However, Martinrea is positioning itself for the future. I like that.

Bottom line

How long it takes for Martinrea to see this joint venture yield fruit remains to be seen. However, it’s certainly a step in the right direction.

While not necessarily an EV stock right now, I think Martinrea is moving in the right direction. I also think the company’s existing infrastructure and experience in producing various metal components for other vehicles could come in handy for EV players looking to ramp up production rather quickly.

Accordingly, Martinrea is a stock that’s on my watch list right now. This is an EV stock in the making. Accordingly, I think there’s a lot of potential upside with this company right now.

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 Chris MacDonald has no position in any of the stocks mentioned.

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