Electric vehicles accounted for 10% of all new car sales in 2022. That makes EV penny stocks an exciting proposition for investors. These companies’ significant upside potential balances the risks posed by the fast-growing EV market. In short, any EV penny stocks under $1 below have a chance to develop a more robust market relative to its established competition, due to this sector’s strong overall growth trends.
In the U.S., electric vehicles accounted for 5.8% of all cars sold in 2022. While overall car sales fell 8% in the U.S. in 2022, EV sales increased 2.6%. These trends suggest that investing in vehicle electrification may be a bright spot in an otherwise difficult market.
With that said, here are three EV penny stocks I think are worth a speculative buy at this stage of the game.
| VLTA | Volta | $0.86 |
| XOS | Xos | $0.96 |
| SOLO | Electrameccanica | $1.01 |
Volta (VLTA)
Volta (NYSE:VLTA) is among the unique EV penny stocks to buy, in that the company’s stock itself is being fully bought out. The company is being acquired by Shell (NYSE:SHEL) per news released on 18 January. Shell will pay $169 million for the company’s charging and media networks, which it acquired at an 18% premium over the stock’s 17 January closing price.
That brings Volta’s share price to 86 cents at the time of writing. The deal is expected to close during the first half of this year, meaning VLTA stock will no longer be listed on any public exchange once the deal closes. Volatility around Volta’s share price is sure to occur as shareholders decide what to do in the interim. That volatility is likely to create price swings that traders can benefit from.
The deal is a clear indication that Shell’s push toward decarbonization continues. Volta had operated independently and was subject to capital constraints that limited growth per its interim CEO, Vince Cubbage. Shell’s more extensive resource base will open Volta to more significant opportunities in the future. I think this is a stock worth buying on any dips, as I like the ability to parlay these shares into Shell stock once the deal is completed.
Xos (XOS)
Xos (NASDAQ:XOS) is an up-and-coming EV stock worth considering. The company manufactures Class 5 through Class 8 battery-electric commercial vehicles, fleet services, and software solutions.
The company is building commercial vehicles for companies, including Loomis, a cash transportation company. Additionally, the firm also recently launched its mobile fleet management app, Xoshere Go, for customers and authorized dealers. That means those operators will now be able to manage the performance and health of their respective fleets on the go.
Xos’ most recent earnings, in Q3, show that the company reported $11 million in sales. That represented a 12% increase on a sequential basis. Furthermore, the company delivered 88 units, up from 71 units in the previous quarter. However, Xos also recorded a net loss of $23.3 million and an operating loss of $32.2 million.
The company expects to deliver between 150 to 200 units in the second half of 2022, leading to revenue as high as $25.6 million. Notably, the stock maintains an overweight rating and a target price of $3.15, much higher than its current price of $1.
Electrameccanica (SOLO)
Electrameccanica (NASDAQ:SOLO) stock represents another niche EV manufacturer. The company’s flagship SOLO vehicle is a three-wheeled EV that competes with scooters and other small vehicles with utility in denser urban areas. The company is approaching the market from a product-fit perspective.
The SOLO’s price ranges from $18,500 to $24,500. The company’s base model is marketed toward consumers, while its higher-end models include a cargo box and are aimed at the commercial sector.
Like Xos, SOLO stock also has a significant upside based on its current price around $1 per share.
The company commissioned its Mesa, AZ, headquarters in December. Leaders at the company are undertaking extensive efforts to consolidate overall operations, including manufacturing at that site. Additionally, the company recently reduced its employee base outside of Arizona by 57%, culling 98 positions. That will improve operating costs by $10 million.
Electromeccanica Vehicles reported $1.44 million in sales during Q3. That represented a 12X improvement over the previous year and included 103 contract-manufactured SOLO vehicles, with 64 deliveries expected.
Penny Stocks
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.