Whether you are an environmentalist or not, there is no denying that the future is electric, and you will have to adapt to the changing environmental needs sooner or later. Governments worldwide are working rapidly to reduce environmental damage and are implementing policies to transition toward a cleaner and greener future. This has led to the massive growth of the electric vehicle industry in the last five years, and the subsidies introduced by the Inflation Reduction Act will also boost sales in the near term. Smart investors have started looking for the best EV stocks to buy now to make the most of the transition toward EVs.

With gas prices surging to all-time highs, the interest in electric vehicles has grown. EVs have shown strong growth over the past two years, and I believe they will continue to grow this decade. Given the sales numbers reported by EV makers, it is clear that the interest in EVs is growing, and there is a massive market out there. Tesla (NASDAQ:TSLA) may be a leader in the EV industry, but several companies have started to give it stiff competition. With that in mind, let’s compare the three hot EV stocks in the market today. This article looks at the best EV stocks to buy now.

Best EV stocks to buy now: Rivian Automotive (RIVN)

When looking at the best EV stocks to buy now, let’s start with Rivian (NASDAQ:RIVN). The EV maker is competing in a crowded market and is not ready to take the route of price cuts. It has an ambitious outlook and is very responsive to the customers’ needs. RIVN stock is trading at $13 today, much lower than the 52-week high of $40. The stock is down 55% over the past six months, from $30 to $13. This could be due to macroeconomic factors and the China lockdown that affected all EV makers. However, RIVN stock still looks like a good long-term bet.

The premium EV maker recently reported first-quarter results and maintained its outlook of producing 50,000 EVs in 2023. However, it only produced 9,395 EVs in the first quarter, and looking at that figure, it looks like producing 50,000 vehicles in the next nine months could be tough.

It reported $661 million in sales in the first quarter and a net earnings loss of $1.79. Its revenue showed nearly a 600% rise year-over-year, and its backlog of 70,000 reservations in 2021 reached 114,000 in 2022. The company hasn’t reported this figure after that. It also plans to launch a mass-market vehicle next year. My colleague Larry Ramer expects the stock price to hit $165 by 2028. Rivian has solid liquidity, but it can report better numbers if it manages to cut costs. It has a strong balance sheet, ambitious plans, and a premium model with high market demand. RIVN stock looks like a good long-term bet, but investors should consider the risks.

Li Auto (LI)

A recent favorite of investors, Li Auto (NASDAQ:LI), has been making solid moves in the competitive EV industry. After reporting impressive quarterly results, Li Auto is here to triple its model lineup by 2025. The company reported a positive income from operations compared to last year’s loss. Its net income was $136 million, and the deliveries increased 66% YOY to more than 52,584 vehicles.

In April, the company delivered 25,681 vehicles, up 516% YOY. Li Auto has hit a delivery number of 78,265 in just four months. Now, it plans to deliver between 76,000 to 81,000 vehicles this quarter, which looks like an achievable number to me. It only needs to deliver 55,319 vehicles in two months to meet the higher end of the target, which would mean over a 166% rise compared to the previous year’s second quarter. Li stock is one of the best EV stocks to buy, trading at $28 today.

Li Auto has $10 billion in cash and is growing profits. However, Li’s cost of sales is alarmingly high and has nearly doubled (102.2%) in the recent quarter from the same period the previous quarter. Until the company manages to keep the costs in control, it will not be able to report stellar profit numbers.

Li Auto looks like a promising EV startup with solid demand for its EVs, but only if it can control the costs will it be able to make the most of its potential. Currently, LI stock is the best EV stock compared to the other two companies discussed here. Morgan Stanley has raised its price target to $40 with an Overweight rating. Even BoFA has a buy rating with a price target of $37.

Polestar (PSNY)

A Swedish EV startup, Polestar (NASDAQ:PSNY), has struggled but remained relative in the past year. Despite the rising competition, the company delivered 51,500 cars in 2022, an 80% rise year over year. That said, it delivered 12,076 cars in the first quarter, up 26% year over year. However, after the results, it trimmed its guidance for this year from 80,000 to 65,000. PSNY stock is trading at $3.44, down from the 52-week high of $13.

However, the stock has declined 45% in the past six months. It recently dropped after the company cut guidance, citing the pushback of the production of Polestar 3 because of software issues. Polestar now expects to roll off production in the first quarter of 2024. It aims to operate in 30 markets by the end of this year and achieve sales of 290,000 vehicles by the end of 2025. The numbers seem ambitious, but if the company manages to ramp up production, we could see them become a reality.

The company saw a 26% rise in revenue YOY to $546 million, and its adjusted loss per share was $0.10. The management expects to see 60% growth in 2023, and if it aims to achieve the same, we could see the losses reducing. It is relatively new in the EV industry and not yet profitable, but the upside potential is massive. PSNY stock looks attractive to me, but it is not without risks. However, it is a stock EV enthusiasts should keep an eye on.

On the date of publication, Vandita Jadeja did not hold (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.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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