The estimates of Wall Street analysts for renewable energy firms are improving as policymakers announce massive electrification and carbon reduction programs. US President-elect Joe Biden’s administration is expected to be more involved in terms of transport electrification initiatives and environmental protection policies.
In a recent survey, Goldman Sachs (GS), the largest investment bank, said that, according to its estimates, global electric vehicle sales will hit 1.8 million units this year, up to 8.3 million units by 2025, and up to 34 million units by 2035. As a result, in 2030 and 29 percent in 2035, hybrid vehicles will account for 18% of global sales. At the same time, the United States and Western Europe will see the greatest growth, with the share of electric vehicles projected to hit 50 percent by 2035.
Two electric car companies were listed by leading Goldman analysts, predicting that they will lead the way over the next four years. There is also a manufacturer that deserves recognition, but its shares are still receiving the “hold and see” recommendation.
The Li Auto (LI)
As of the first day of trading, China’s Li Auto (LI), which debuted on NASDAQ this summer, reported a solid 102.37% price rise on the back of strong demand for its electric vehicles in the domestic Chinese market.
In November last year the first Li model, the Li ONE hybrid crossover, was released and the company had sold more than 22,000 units by October this year. Sales hit 3,700 in October, making the Li ONE the best-selling Chinese electric car brand.
A stronger state policy of electrifying the transportation of the nation with incentive for carmakers and a population of 1.4 billion forms the largest electric vehicle market is China.
Li cars also benefit from being plug-in hybrids and having a petrol engine, which is important since China is building charging stations in the process and its current network is small.
FEI Fang, the Goldman Sachs analyst, rates the stock with a “buy” rating and a target price of $60, nearly double the closing price of $33.31 on Tuesday.
Tesla Inc (TSLA)
With a 676.76% rise since the beginning of the year and an upcoming addition to the S&P 500 index, Tesla (TSLA) shares, at least in the short term, look like the absolute winners of the electric car industry.
In the last quarter, Tesla achieved record deliveries, revenue growth of 39%, and three consecutive quarters of profit.
Market analysts have calculated the stable free cash flow of the automaker for the quarter at $1.4 billion.
NIO Limited (NIO)
Since the beginning of the year, Nio Limited (NIO) shares have outperformed Tesla by rising 1058%. The business undoubtedly deserves attention and observation, but Goldman experts rate their shares with a “buy” recommendation, although their target price of $59 is nearly 27% higher than the closing price of $46.56 on Tuesday.
The Chinese electric car manufacturer announced a 146 percent rise in sales over the last quarter and a 2.5-fold increase in deliveries compared to last year. Its new electric Nio EC6 crossover is seen as a competitor in China to Tesla’s upcoming Model Y.
Instead of direct buying, Nio has launched a new battery leasing programme, which lowers the list price of vehicles.
Other Nio announcements include a 100-kilowatt-hour battery, which will expand the electric vehicle range to 615 kilometers, and plans to increase production and begin exporting to Europe by 2021.