Goldman Sachs EV and Battery Stocks: Top 10 Stock Picks
In this article, we discuss the top 10 Goldman Sachs EV and battery stocks. If you want to skip our detailed discussion on the EV sector, head directly to Goldman Sachs EV and Battery Stocks: Top 5 Stock Picks.
In 2022, electric vehicles constituted 14% of the total new car sales, marking an increase from approximately 9% in 2021 and less than 5% in 2020. Leading the EV market was China, contributing around 60% of the global electric car sales. China also harbors over half of the world's electric cars, surpassing its 2025 sales target for new energy vehicles. In Europe, the second-largest market, electric car sales grew by over 15% in 2022, resulting in electric cars accounting for more than one in every five sold. The United States, the third-largest market, observed a 55% surge in electric car sales in 2022, with electric vehicles comprising 8% of the total sales share. While electric car sales remain modest in non-major markets, 2022 witnessed substantial growth in countries like India, Thailand, and Indonesia. These nations collectively experienced more than a threefold increase in electric car sales compared to 2021, amounting to 80,000 units sold.
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In Q1 2023, global electric vehicle sales for passenger cars surged by 32% compared to the previous year, as indicated by Counterpoint's Global Passenger Electric Vehicle Model Sales Tracker. During this quarter, one out of every seven cars sold was an EV. Battery EVs (BEVs) constituted 73% of all EV sales for the quarter, with plug-in hybrid EVs (PHEVs) accounting for the remainder. In terms of market share, the US surpassed Germany and secured the position of the second-largest EV market globally in Q1 2023, with China maintaining its lead. China's EV sales exhibited a growth of 29% year-over-year, despite a 12% drop in overall passenger vehicle sales in the country. The US experienced a remarkable 79% year-over-year increase in EV sales for the quarter.
Also Read: 10 Best Small Cap Electric Vehicle Stocks to Buy
China is the biggest EV market and there are big moves happening in the region. For example, on August 28, Chinese electric vehicle manufacturer XPeng Inc. (NYSE:XPEV) announced its intention to acquire Didi's electric car development business in a deal valued at up to $744 million. This strategic move aims to enhance XPeng Inc. (NYSE:XPEV)’s production capabilities, reduce costs, and strengthen its collaboration with Didi. Following this news and XPeng Inc. (NYSE:XPEV)’s recent partnership with Germany's Volkswagen, the company's shares surged by 11% in Hong Kong. As part of the agreement, Xpeng plans to introduce a new A-class model, named MONA, under a new brand next year. This vehicle will fall within the 150,000 yuan ($20,000) price range, cheaper than Xpeng's existing offerings that are generally priced above 200,000 yuan. The company expects to sell a minimum of 100,000 MONA cars annually to both retail customers and ride-hailing services.
In this article, we discuss some of Goldman Sachs’ top EV and battery stocks, which include Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and General Motors Company (NYSE:GM).
Our Methodology
We used Goldman Sachs’ Q2 2023 portfolio and selected the 10 biggest positions in EV and battery firms during the quarter for this list. We have mentioned Goldman Sachs’ stake value and the hedge fund sentiment towards each stock as of the second quarter of 2023. The list is ranked in the ascending order of the firm’s stake value in each holding.
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Goldman Sachs EV and Battery Stocks: Top Stock Picks
10. Toyota Motor Corporation (NYSE:TM)
Goldman Sachs’ Stake Value: $172,398,065
Number of Hedge Fund Holders: 13
Toyota Motor Corporation (NYSE:TM) engages in the design, production, assembly, and distribution of passenger cars, minivans, commercial vehicles, and related accessories. The company is also involved in the manufacture of fully electric and hybrid vehicles. In the second quarter of 2023, Goldman Sachs held 1.07 million Toyota Motor Corporation (NYSE:TM) shares worth $172.3 million.
On August 14, Goldman Sachs observed that Toyota Motor Corporation (NYSE:TM) has under-recognized potential to make a substantial impact in the electric vehicle sector. Toyota Motor Corporation (NYSE:TM) has ambitious plans to significantly increase its electric vehicle sales, aiming to achieve 1.5 million cars sold by 2026 and a further 3.5 million by 2030. These projections indicate a substantial leap from the 38,000 units sold in the previous fiscal year and the projected 202,000 EV sales for the ongoing fiscal year, concluding in March of 2024. Goldman Sachs has set a target price of ￥2,800 for Toyota Motor Corporation (NYSE:TM) stock.
According to Insider Monkey’s second quarter database, 13 hedge funds were bullish on Toyota Motor Corporation (NYSE:TM), compared to 7 funds in the last quarter. Ken Griffin’s Citadel Investment Group is the leading stakeholder of the company, with 106,398 shares worth just over $17 million.
Like Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and General Motors Company (NYSE:GM), Toyota Motor Corporation (NYSE:TM) is one of the top Goldman Sachs EV and battery stocks to monitor.
Here is what Baron Fund has to say about Toyota Motor Corporation (NYSE:TM) in its Q1 2022 investor letter:
“Toyota’s (NYSE:TM) “kaizen” manufacturing philosophy is based on improving manufacturing by using “just in time” processes to eliminate waste and reduce inventory carrying costs. Clearly the company does not contemplate disruptive change that will dramatically lower costs and improve quality.”
9. NIO Inc. (NYSE:NIO)
Goldman Sachs’ Stake Value: $153,199,249
Number of Hedge Fund Holders: 19
NIO Inc. (NYSE:NIO) is a Chinese company that designs, develops, manufactures, and sells smart electric vehicles, including SUVs and sedans. They offer various power solutions like home charging, battery swapping, and mobile charging services. NIO Inc. (NYSE:NIO) is involved in energy services, technology development, manufacturing of powertrains and batteries, as well as sales and after-sales management. It is one of the top Goldman Sachs EV and battery stocks. In Q2 2023, the firm owned a $153 million stake in NIO Inc. (NYSE:NIO).
On August 29, NIO Inc. (NYSE:NIO) reported a Q2 non-GAAP EPADS of -$0.45 and a revenue of $1.21 billion, falling short of Wall Street estimates by $0.04 and $60 million, respectively. In the second quarter of 2023, vehicle deliveries totaled 23,520, including 10,492 electric SUVs and 13,028 electric sedans. This marks a 6.1% drop from the same period in 2022 and a 24.2% decrease from Q1 2023.
According to Insider Monkey’s second quarter database, 19 hedge funds were long NIO Inc. (NYSE:NIO), compared to 18 funds in the preceding quarter.
8. Genuine Parts Company (NYSE:GPC)
Goldman Sachs’ Stake Value: $154,719,282
Number of Hedge Fund Holders: 34
Genuine Parts Company (NYSE:GPC) is engaged in the distribution of automotive replacement parts and industrial components. The company supplies replacement parts for a range of vehicles, including hybrids, electric vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, farm vehicles, small engines, farm equipment, marine equipment, and heavy-duty machinery. Genuine Parts Company (NYSE:GPC) is one of the top Goldman Sachs EV and battery stocks.
On August 15, Genuine Parts Company (NYSE:GPC) declared a quarterly dividend of $0.95 per share, in line with previous. The dividend is payable on October 2, to shareholders of record on September 8.
According to Insider Monkey’s second quarter database, 34 hedge funds were bullish on Genuine Parts Company (NYSE:GPC), compared to 39 in the prior quarter. Israel Englander’s Millennium Management is the leading stakeholder of the company, with 698,238 shares worth just over $118 million.
Carillon Tower made the following comment about Genuine Parts Company (NYSE:GPC) in its Q3 2022 investor letter:
“Genuine Parts Company (NYSE:GPC) operates two global distribution businesses, one focused on automotive replacement parts and the other focused on industrial replacement parts. Both businesses experienced strong same store sales growth and margin expansion in the prior quarter, as demand continued to rebound from pandemic lows.”
7. Cummins Inc. (NYSE:CMI)
Goldman Sachs’ Stake Value: $201,726,079
Number of Hedge Fund Holders: 33
Next on our list of the top Goldman Sachs EV and battery stocks is Cummins Inc. (NYSE:CMI). Cummins Inc. (NYSE:CMI) engages in the design, production, distribution, and maintenance of diesel and natural gas engines, as well as electric and hybrid powertrains, and their associated parts. The company has a focus on advanced power systems, including elements like batteries, fuel cells, and hydrogen production technologies. Moreover, Cummins Inc. (NYSE:CMI) provides services such as filtration, aftertreatment, control systems, air handling systems, automated transmissions, and electric power generation systems. In the second quarter of 2022, Goldman Sachs owned 822,834 shares of Cummins Inc. (NYSE:CMI) valued at $201.7 million.
On August 3, Cummins Inc. (NYSE:CMI) reported a Q2 non-GAAP EPS of $5.18, falling short of Wall Street expectations by $0.04. The revenue increased 31.1% year-over-year to $8.64 billion, outperforming market consensus by $250 million.
According to Insider Monkey’s second quarter database, Cummins Inc. (NYSE:CMI) was found in 33 hedge fund portfolios, compared to 38 in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the leading stakeholder of the company, with 2 million shares worth $502 million.
6. Ferrari N.V. (NYSE:RACE)
Goldman Sachs’ Stake Value: $329,618,875
Number of Hedge Fund Holders: 30
Ferrari N.V. (NYSE:RACE) is synonymous with luxury performance sports cars worldwide. At present, Ferrari N.V. (NYSE:RACE) provides four plug-in hybrid vehicle models. However, the company does not have intentions to introduce fully electric vehicles until 2025. Ferrari anticipates that by the conclusion of this decade, electric cars will make up 40% of its vehicle lineup. Securities filings for Q2 2023 reveal that Goldman Sachs held just over 1 million shares of Ferrari N.V. (NYSE:RACE) worth $329.6 million.
On August 2, Ferrari N.V. (NYSE:RACE) announced Q2 non-GAAP earnings per share of €1.83. The revenue climbed 14.1% year-over-year to €1.47 billion. In the fiscal year 2023, the company anticipates adjusted earnings per share to fall within the range of €6.25 to €6.40, which has been increased from the earlier projection of €6.00 to €6.20.
According to Insider Monkey’s second quarter database, Ferrari N.V. (NYSE:RACE) was part of 30 hedge fund portfolios, compared to 32 in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP held the largest stake in the company, comprising 357,181 shares worth $116.7 million.
In addition to Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and General Motors Company (NYSE:GM), Ferrari N.V. (NYSE:RACE) is one of the premier Goldman Sachs EV and battery stocks to consider.
Ensemble Capital made the following comment about Ferrari N.V. (NYSE:RACE) in its Q1 2023 investor letter:
“Ferrari N.V. (NYSE:RACE) (+26.48%): The luxury automaker’s long awaited Purosangue, their first four door, four seater vehicle, has proven so popular that the company announced that they have ceased accepting new orders as they are sold out through all of this year and into 2024. The Purosangue is designed not as a copycat sports utility vehicle that many other luxury automakers sell, but as a true Ferrari car that their devoted fan base can use for more practical transportation needs. Since the average Ferrari is only driven a few thousand miles a year or less, they are best understood as mechanical works of art rather than a means of transportation. But with the introduction of the Purosangue, Ferrari enthusiasts will have a vehicle that meets transportation needs, while still delivering the extremely high end experience that you would expect from a car that costs about $500,000.”
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Disclosure: None. Goldman Sachs EV and Battery Stocks: Top 10 Stock Picks is originally published on Insider Monkey.