If You Can Only Buy One EV Stock in May, It Better Be One of These 3 Names

Electric vehicle sales are expected to accelerate this year, creating a big opportunity for some of the top EV stocks to buy.

We have to remember that 2023 EV sales were strong. U.S. consumers, for example, bought 1.19 million EVs last year, up 46% year-over-year, according to Cox Automotive, as noted by Inside Climate News.

It was the first time U.S. EV sales reached a million in a year.

For 2024, sales are expected to increase anywhere from 20% to 30%. Plus, according to Michelle Krebs, executive auto analyst for Cox, “EV sales are increasing faster than any other segment in the industry.”

Still, sales could be better. One key issue holding back many potential EV buyers is the severe need for charging infrastructure in the U.S.

In fact, according to a 2023 Cox Automotive Survey, as mentioned by CNBC, 32% of consumers considering an EV cited a “lack of charging stations in my area” as a critical barrier. Looking at the positive side, EV sales are on the rise, which should fuel upside in EV stocks to buy, such as:

EV Stocks to Buy: Tesla (TSLA)

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Tesla (NASDAQ:TSLA) has a lot of issues. But it’s still one of the top EV stocks to buy and a major beneficiary of the electric vehicle story. It still owns about 51.3% of the EV market despite its challenges. 

Plus, “While Tesla was out selling 50,000 new EVs, Ford was struggling to hit 10,000 EVs sold in second place,” reported QZ.com. “Behind it was Hyundai, which shifted 5,686 electric cars in March and BMW sold 4,246 electric models.”

Sales could accelerate with the potential for newer, cheaper electric vehicles. As noted in a first-quarter earnings report, the company did note, “We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.”

“These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up,” they added.

In short, use any weakness in Tesla as a buying opportunity.

KraneShares Electric Vehicle and Future Mobility Index ETF (KARS)

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Or, if you’d instead diversify with some of the biggest electric vehicle names at a low cost, there’s an exchange-traded fund such as the KraneShares Electric Vehicle and Future Mobility Index ETF (NYSEARCA:KARS). With an expense ratio of 0.72%, this ETF provides exposure to companies involved in producing EVs and their components.

It’s also benchmarked to the Bloomberg Electric Vehicles Index, which includes stocks involved with EV “production, autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing and electric infrastructure businesses,” according to KraneShares.com.

Some of its top holdings include Tesla, Li Auto, Albemarle (NYSE:ALB), Rivian Automotive(NASDAQ:RIVN), Nio Inc. (NYSE:NIO), and XPeng (NYSE:XPEV).

What’s nice about this ETF is that I can buy 100 shares and access all of its holdings for less than $2,200. Or, I could just buy one of its holdings — let’s say 100 shares of Tesla for just over $17,600 while also losing the ability to diversify at a lower cost.

Freeport McMoRan (FCX)

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With electric vehicle sales expected to accelerate, copper stocks like Freeport McMoRan (NYSE:FCX) will benefit. After all, each electric vehicle needs about 2.5x more copper than an internal combustion engine, noted CNBC.

They added that an S&P Global report said, “copper demand nearly doubling to 50 million metric tons by 2035. By 2050, demand will reach more than 53 million metric tons. To put this figure in perspective, S&P Global noted that that’s “more than all the copper consumed in the world between 1900 and 2021.”

We also have to consider that the latest tariffs on Chinese batteries could lead to an increase in domestic battery production, which will require a stronger supply chain—which is bullish for FCX. Further upside is likely, coupled with a severe supply-demand imbalance for the metal.

In addition, I’d use the latest temporary dip in FCX as a buying opportunity. From its current price of $53.62, I’d like to see it break to new all-time highs.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.