With the gradual phasing out of fossil-fuel-powered vehicles, the EV industry is expected to grow significantly over the long term. However, not all stocks in the sector are well-positioned to capitalize on the industry tailwinds. So, we think it could be wise to avoid EV stocks QuantumScape (QS), Blink Charging (BLNK), and EVgo (EVGO) because their ratings have been recently downgraded, and they have bleak growth prospects. Let’s discuss.The demand for electric vehicles (EVs) and the infrastructure needed to keep them running has grown significantly over the past few years. This can be attributed primarily to increasing concerns about climate change and supportive government policies. According to a recent survey by KPMG, automotive executives think more than half of their sales will be EVs by 2030, in line with U.S. President Biden’s EV sales goal.
However, according to an evadoption report, the number of internal combustion engine (ICE (NYSE:ICE)) vehicles on the road is expected to increase by 20 million this decade. And even though the EV industry is expected to grow significantly, EVs are still likely to be a small percentage of vehicles in operation. So, as the EV industry grows, all companies in the sector may not benefit equally due to sector overcrowding.
EV-related stocks QuantumScape Corporation (QS), Blink Charging Co. (NASDAQ:BLNK), and EVgo, Inc. (EVGO) look overvalued at the current price level, given their companies' bleak growth prospects. Also, analysts have recently downgraded them. So, we think it could be wise to avoid these stocks now.