A lot electric vehicle (EV) stocks soared during the buying frenzy for growth stocks and meme stocks in 2021. But in 2022 and 2023, many of these stocks withered as their growth slowed and the rise rates pushed up their bubbly valuations. The weakness of the Chinese economy and the price war for electric vehicles have exacerbated this pressure.

But with interest rates falling, some of these struggling electric vehicle stocks are starting to look like undervalued growth stocks. Let’s look at three of these actions: Nio (NYSE:NIO), Li Auto (NASDAQ:LI)And Joby Aviation (NYSE:JOBY) — and see why they’re worth snacking on this November.

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1.Nio

Nio is a Chinese electric vehicle manufacturer that produces electric sedans and SUVs. It differentiates itself from its competitors with batteries that can be quickly replaced at its exchange stations as a faster alternative to traditional chargers.

Nio delivered its first vehicles in 2018. From 2019 to 2023, its annual deliveries increased eightfold, from 20,565 to 160,038 vehicles. Its annual revenue grew at a compound annual growth rate (CAGR) of 63%. However, its growth slowed in 2022 and 2023 due to supply chain constraints, weather-related disruptions, macroeconomic challenges in China, and the persistent price war in the electric vehicle market.

This slowdown scared the bullsbut Nio shipments grew 36% year-over-year in the first nine months of 2024, compared to 33% year-over-year growth in the first nine months of 2023. Its vehicle margins also stabilized as it increased its market share, sold a wider range of premium vehicles and rolled out its cheaper Onvo smart vehicles in China. It is also expanding into Europe, but those plans could be hampered by new tariffs on Chinese electric vehicles.

But despite this pressure, analysts expect Nio’s revenue to grow at a CAGR of 28% between 2023 and 2026. It is not yet profitable, but its stock appears undervalued at less than next year’s sales. It could eventually achieve a much higher valuation as it overcomes its near-term challenges.

2. Li-Auto

Li Auto is one of China’s leading producers of plug-in hybrid electric vehicles (PHEV). It sells four plug-in hybrid SUV models (the L6, L7, L8 and L9) and launched its first fully battery-powered electric minivan, the Li Mega, earlier this year.

Li started delivering its first vehicles at the end of 2019. From 2020 to 2023, its annual deliveries increased more than 11-fold, from 32,624 to 376,030 vehicles. From 2020 to 2023, its revenue grew at a CAGR or 136%. It also became profitable for the first time in 2023.

Li’s profits grew even as it built a vast network of charging stations across China. At the end of its last quarter, it operated 894 charging stations with 4,286 charging stations. It also operated 479 retail stores in 145 cities.

Li faces near-term headwinds. The price war in the electric vehicle market is reducing its margins on vehicles, while escalating trade tensions and new tariffs have forced it to postpone its first overseas expansion, in the United States, Middle East and other overseas markets.

But from 2023 to 2026, analysts expect Li’s revenue to grow at a CAGR of 25%, while its net profit will grow at a CAGR of 15%. These are exceptional growth rates for a stock that trades at just 17 times forward earnings and less than 1 times next year’s sales. Like Nio, Li could attract a much higher valuation if the EV pricing war subsides, China’s economy stabilizes and economies of scale continue to dilute its operating expenses.

3. Joby Aviation

Joby Aviation develops electric vertical take-off and landing (eVTOL) aircraft. Its first commercial eVTOL aircraft, the S4, carries one pilot and four passengers, travels up to 100 miles on a single charge and has a top speed of 200 mph. It is primarily designed as a cheaper, faster, quieter and more environmentally friendly alternative to traditional helicopters. It’s also easier to land in urban areas, making it a good choice for local air taxi services.

Joby currently holds a $131 million contract with the US Department of Defense (DOD) to deliver up to nine eVTOL aircraft to the US Air Force. It delivered its first aircraft to Edwards AFB last year and plans to deliver its next two aircraft to MacDill AFB in 2025. It is also developing a hydrogen-powered eVTOL aircraft, which could potentially achieve five times the range of its first generation battery. -powered equivalents.

Joby is still a very speculative action. Analysts expect it to generate just $395,000 in revenue this year, while it posts a net loss of $467 million. But by 2026, they expect it to generate $104 million in revenue, with a net loss of $532 million.

Based on these expectations and its enterprise value of $3.56 billion, Joby’s stock is not very expensive, at 7 times its projected 2026 sales. Toyota And Delta Airlines are still heavily invested in Joby’s future, so its stock could skyrocket as more companies replace their helicopters with its eVTOL planes.

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Leo Sun has no position in any of the stocks mentioned. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.