3 Cheap EV Stocks to Buy During the Market Slump

Stocks to buy

The electric vehicle (EV) revolution is in full swing, with established automakers and innovative startups vying for market share. However, the notion of cheap EV stocks to buy is entirely relative, and a cheap valuation doesn’t always reflect the company’s long-term growth prospects. 

Over the last year, the global EV market saw slower growth rates as higher interest rates tempered demand. Furthermore, several EV startups went underwater, as they simply could not compete with the big players. While interest has softened for EV stocks, the market is set for unprecedented growth over the next several decades. 

Now, let’s discover the top three cheap EV stocks to buy in 2024!

Ferrari NV (RACE)

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Ferrari NV (NYSE:RACE) might not be the first company that comes to mind when considering the best cheap EV stocks to buy. However, the prancing horse is not immune to the changing automotive landscape. While Ferrari is known for its powerful gasoline engines and exhilarating driving experience, it recently announced plans to release its first all-electric supercar in 2025.

Investors are excited about the company’s future, as they have continued to deliver strong year-over-year (YOY) growth over the last several years. Ferrari’s strategic shift to EVs is coming at the perfect time, as consumer sentiment continues to gradually shift toward favorability. In FY23, management delivered another year of record results, with revenue up 17% YOY to EUR 5.97 billion. Net income rose 34% YOY to EUR 1.25 billion, or EUR 6.90 per share. This was a huge milestone for the company as its annual net profit exceeded EUR 1 billion for the first time. The company maintains a strong order book out to 2026, and its future in the EV market remains extremely bright.

Tesla (TSLA)

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Tesla (NASDAQ:TSLA) remains the undisputed leader in the global EV market. While TSLA stock has experienced extreme volatility, it’s undeniable that Tesla will continue to innovate and expand its production capacity. That will be evident as the company looks to ramp up production despite slower demand for EVs. 

Tesla expects deliveries to decrease in the 2024 fiscal year. Additionally, the company forecasted a decline in vehicle gross margins. That has certainly spooked investors in the short term, but the long-term outlook remains intact. Tesla has several different tailwinds to drive growth over the next decade. Some include the ramp of the Model 3, Model Y and Cybertruck models. That’s also true with its growing energy storage business and the released FDS V12. Since the company became profitable in 2020, Tesla’s P/E ratio of 39 is on the cheap side from a historical sense. That makes Tesla one of the top cheap EV stocks to buy now.

ON Semiconductor (ON)

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ON Semiconductor (NASDAQ:ON), is a leading supplier of power and signal management semiconductors, primarily catering to the automotive and energy storage markets. The company has also been impacted by the slower demand in the EV market in the past 12 to 15 months. However, the company still delivered strong bottom-line growth in the 2023 fiscal year.

ON Semiconductor is well-positioned to capitalize on the growing demand for EV components over the next decade. The automotive industry is rapidly shifting towards SiC modules, and ON Semi offers a wide range of solutions. Those include battery management chips, SiC MOSFETs, gate drivers and sense amplifiers. It has also just recently completed the expansion of its SiC production facility in Bucheon, South Korea. The new facility is expected to create more than 1,000 new jobs over the next 3 years and produce up to 1 million SiC wafers annually. With a P/E of just 15, ON Semi should certainly be kept on your radar in 2024.

On the date of publication, Terel Miles 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.

Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.

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