After the latest Tesla figures showed that it exceeded expectations for vehicle delivery, investors are flocking to electric vehicle stocks. Tesla shares rose even more after the news, as they are up 124% in value year-to date. Rivian's shares were also boosted after the company reported that its deliveries exceeded expectations. Vanda Research said in a note on Thursday that it is seeing signs of a rotation away from AI stocks and towards EVs. The note stated that "we expect to see more demand from retail for EV stocks in the future," highlighting "laggards", such as Nio, Li, and Plug. Morgan Stanley's report on China-made EVs was optimistic in a report published on July 5. It said that a flood affordable electric cars from China and emerging markets would "meet demand for cheaper EVs." The bank stated that "just a few short years ago, China's cars were of inferior quality and poorly designed, but they now surpass their rival foreign models in terms of affordability, quality, as well as the user-friendly tech experience." The bank's base case assumes 38% growth in annual overseas sales for China-made EVs through 2030. CNBC Pro screened the KraneShares Electric Vehicles & future Mobility Index ETF, and the Global X Autonomous & Electric Vehicles ETF on FactSet to see which EV stock is expected to continue rising. The stocks that were selected had an average price target with a 10% upside, at least 10 analysts covering it, and at least 50% analysts giving the stock a buy recommendation. Analysts gave the most potential upsides for their price targets to Chinese EV manufacturers BYD (31%) and Geely Automobile (45%). BYD, the Chinese EV maker, announced last week that it would launch a new, electric SUV. It is its biggest competitor to Tesla's Model Y. Stellantis, which trades in New York and Paris, received the highest rating from analysts, 78%. Bernstein's June report predicted that increased investment in software would lead to incremental revenues for car manufacturers.
Stellantis was cited as an example. The carmaker has forecast $23 billion of annual revenue by 2030. This report was contributed by CNBC's Michael Bloom and John Melloy.