In the United States, the average price for a gallon of gas is sitting just below $5. When fueling up for summer road trips, many Americans are going to be feeling pain at the pump. This alone will incentive consumers to consider purchasing an electric vehicle for their next car. If the price of gas doesn’t drop soon then it could create a major tipping point for the EV market. For investors, this signals that there is still plenty of time to get in on this megatrend. With that in mind, let’s break down the top EV stocks to watch as we head into the summer months.

Tesla (NASDAQ: TSLA)

When discussing electric vehicles, it’s still hard to start anywhere other than Tesla. After setting multiple records in Q1, Tesla is most definitely one of the top EV stocks to watch this summer. This is where Tesla currently stands in terms of its financials:

• Revenue of $18.76 billion, up 81% YoY.
• Gross profit of $5.5 billion, up 147% YoY.
• Total EV production of 305,407, up 69% YoY.
• Total EV deliveries of 310,048, up 68%.

In total, Tesla set a Q1 quarterly record for revenue, vehicle deliveries, operating profit, and operating margin (which was over 19%). On top of that, Tesla recently finished the construction of its gigafactory in Berlin. This, in addition to its factory in Texas, will help Tesla increase production. Looking forward, Tesla is focused on growing as “fast as reasonably possible.”

Heading into the summer, Tesla has a tremendous lead in the electric vehicle market. However, even Tesla isn’t immune to the dismal macroeconomic factors that the world is facing. There is a good chance that the U.S. will enter a recession in the next year or so. This is probably part of the reason that Tesla is laying off 10% of its staff. Tesla has already laid off nearly 200 employees in its autopilot division. If you are interested in buying Tesla stock, be sure to keep this in mind as a potential risk factor.

Ford (NYSE: F)

In the United States, there is really only one legitimate competitor to Tesla. After posting a number of record sales in May, Ford was second behind Tesla in terms of total EV sales.

In May, Ford reported record EV sales of 6,245, up 222% from last year. This growth was almost 4 times faster than the overall U.S. electric vehicle segment in May. This makes Ford one of the hottest EV stocks to watch for the summer.

As far as Ford’s EVs, the Mustang Mach E generates the bulk of its EV sales. The recently released F-150 Lightning is also trending in the right direction.

It’s also worth noting that the traditional Ford F-150 has been America’s top-selling truck for 45 years. In 2021, Ford sold approximately 726,000 F-150s. If Ford can transition this customer base to the electric F-150 then it will easily become a leader in the EV industry. What’s interesting, however, is that 75% of the people who have reserved a Ford F-150 Lightning are new to Ford. So far, it seems as if Ford is attracting a new type of customer with the Lightning. Either way, sentiment around the F-150 Lightning is a key factor to watch as Ford’s EV business matures.

A Race That’s too Close to Call

After Tesla and Ford, there’s no shortage of quality EV stocks to consider. But, the only problem is that it’s really too early to tell which one will end up ahead.

For example, Lucid (NASDAQ: LCID) and Rivian (NASDAQ: RIVN) are sleek startups that have all the flash of futuristic tech companies. They’ve also been successful in raising money and generating investor interest. But, both still have a lot to prove in terms of actually delivering vehicles. There are more EV startups that are even less established than these two. This includes companies like Fisker (NYSE: FSR), Canoo (NASDAQ: GOEV), Faraday Future (NASDAQ: FFIE), Lordstown (NASDAQ: RIDE) and Xos (NASDAQ: XOS).

Lots of these EV startups have flashy investor decks and lofty ambitions. But, few have actually created and consistently delivered an electric vehicle. For that reason, most of them are deep in the red.

Then, we also have to consider the EV stocks to watch in China. A few of the top players are Nio (NYSE: NIO), Xpeng (NYSE: XPEV), and Li Auto (NASDAQ: LI). However, Chinese companies typically play by their own rules in terms of reporting requirements. Despite some early success for Chinese EV companies, buying them can still be a little risky.

Finally, we have to consider that many traditional automakers have made bold statements about transforming their fleets. 5 years from now, some of the top EV stocks to watch might actually be traditional automakers. Companies like Ferrari (NYSE: RACE), General Motors (NYSE: GM), Toyota (NYSE: TM), Volkswagen (OTC: VWAGY) and more are all pushing into EVs.

Essentially, the modern EV industry is like the internet search industry in 1995. There are dozens of contenders. The question is: which one will become Google?

In scenarios like this, it’s a good idea to consider an exchange-traded fund.

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