4 EV Stocks Under $5
EV stocks are sure to be one of the top investments of the 2020s. With legacy automakers and startups alike announcing new EVs left and right, investors are pouring the dollars into these stocks. And many are looking for the best EV stocks under $5.
For many investors, it’s a dream come true; double- or even triple-digit returns are a possibility. But there’s a glaring problem with this situation. Rapid investment drives up share prices, potentially locking some investors out of the market. Look no further than Tesla (Nasdaq: TSLA) stock for a great example of this. Even after its four-to-one stock split, TSLA shares are once again trading above $1,000.
While some brokers offer fractional shares to help less wealthy investors buy shares in Tesla and other large companies, perhaps you don’t have that option. Or maybe you are in the camp that thinks Tesla is overvalued – and will never be as valuable as its current share price suggests.
Whatever the case may be, there are still plenty of options if you aren’t willing to buy stock in a company trading at $1,000 (or more). For instance, try one of these EV stocks under $5:
- Ideanomics Inc. (Nasdaq: IDEX)
- Ayro Inc. (Nasdaq: AYRO)
- ElectraMeccanica Vehicles Corp. (Nasdaq: SOLO)
- Lordstown Motors Corp. (Nasdaq: RIDE)
Best EV Stocks Under $5
Let’s take a closer look at each of these EV stocks under $5 and why they might be worth adding to your portfolio.
No. 4 Ideanomics Inc.
Ideanomics is a global company focused on the adoption of commercial electric vehicles. The New York-based company was founded in 2004, so it isn’t exactly brand new. Ideanomics provides turn-key finance, leasing, and energy management services for commercial fleet operators. It has several subsidiaries, including VIA Motors, that produce the vehicles themselves. Real-world examples include fully electric delivery vans used by major companies such as Walmart.
Ideanomics (IDEX) has a market cap of nearly $600 million, but its shares trade for barely more than $1. The company is not currently profitable, and its cash reserves shrunk during Q3 2021. It also missed its revenue projection by about 16.75%. However, it’s not all bad news. While it did miss its revenue projection, its revenue has been higher as of late. It brought in $27 million in Q3 2021; compare that to $11 million in Q4 2021. Plus, while its profit margin was -188% in Q3, it was much closer to profitable in Q2 and Q1, posting net profit margins of around -20% in each of them.
As Ideanomics increases its revenue and inches closer to profitability, look for this share price to increase over the next 12 months.
No. 3 Ayro Inc.
Let’s take a look at one of the other best EV stocks under $5, Ayro. It’s a Round Rock, Texas-based company founded in 2017. It produces electric vehicles for use in sustainable fleets. Those fleets engage in last-mile distribution and micro-distribution. It raised $10 million in a registered direct offering in November 2020. The main vehicle it offers right now is the Club Car 411, an all-purpose vehicle built for campuses. The vehicle is available in three separate configurations.
While Ayro Inc. (AYRO) isn’t profitable quite yet, it’s already worth more than $56 million. Meanwhile, it has increased its cash on hand and decreased its cost of revenue. Some price targets for AYRO show it as high as $5. However, it has been missing its revenue projections by wide margins; it will probably have to get closer to meeting them before investors feel comfortable putting their money in.
Keep reading for more on the best EV stocks under $5.
EV Stocks Under $5 No. 2 ElectraMeccanica Vehicles
ElectraMeccanica is an EV startup focused on building consumer electric vehicles. So far, it has two vehicles on its website: the SOLO and the eRoadster. The SOLO is available for the reserve and the eRoadster is available for pre-order. The SOLO is a quirky, single-seater vehicle that looks like half (or perhaps two-thirds) of a car. Meanwhile, the eRoadster is an electric car styled to look like the Porsche 356 convertible.
However, given that ElectraMeccanica has only delivered 42 vehicles so far, it shouldn’t be surprising to hear that its stock has had its challenges. The company is worth a little more than $250 million, but things have gone from bad to worse in terms of earnings. It made $298k in Q2 2021; that has slowed to just $110k in Q3 2021. Its net profit margin is nearly -12,000% as a result. The only positive for the moment is it has increased its cash reserves, it has more than $228 million on hand. This is one of the EV stocks under $5 to watch as it looks to complete its production facility in late 2022.
EV Stocks Under $5 No. 1 Lordstown Motors
Lordstown Motors is an electric vehicle manufacturer based in Lordstown, Ohio, and was founded in 2018. It has had a bit of a tumultuous history as it acquired its assembly plant from GM before selling it to Foxconn as it was low on cash. However, Foxconn has said it will produce Lordstown’s Endurance pickup, a four-wheel drive, full-size electric pickup. Plus, the $230 million deal will help Lordstown shore up its cash reserves. As of November 2021, though, Foxconn said it would delay production until Q3 2022.
Clearly, it’s still quite early for Lordstown (RIDE), but the Endurance is an attractive pickup that could do quite well in the U.S. market. Despite having a share price under $4, RIDE has a market cap of over $625 million. There isn’t much report in terms of earnings; the company isn’t yet posting revenue and, thus, there isn’t a profit margin to show. While its cash reserves have declined steadily, the sale of its assembly plant will be a big boost. As such, we could see an increase in its share price over the next year. And this is why many investors are adding it to their list of best EV stocks under $5.
About Bob Haegele
Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.