Remember when electric vehicles (EVs) were supposed to be the next big thing? Major automakers and tech companies invested billions of dollars in the technology. Many startups appeared. Yet, sales of EVs have been disappointing for a while, and some of those startups have disappeared. Even Tesla Inc. (NASDAQ: TSLA) has had to cut prices. Given the changing sentiment in Washington, is there no hope, at least for investors? As it turns out, Wall Street still sees plenty of upside potential in the industry.

Here are some of the EV-related stocks for which analysts have big expectations. (Note that Tesla isn’t one of them.)

Stock	Mean Target	Upside
Blink Charging Co. (NASDAQ: BLNK)	$3.94	157.5%
Li Auto Inc. (NASDAQ: LI)	$29.73	33.6%
LKQ Corp. (NASDAQ: LKQ)	$52.14	45.1%
Nikola Corp. (NASDAQ: NKLA)	$12.40	916.4%
Nio Inc. (NYSE: NIO)	$6.18	47.5%
Polestar Automotive Holding UK PLC (NASDAQ: PSNY)	$1.45	31.8%
Sensata Technologies Holding PLC (NYSE: ST)	$40.41	49.4%
VinFast Auto Ltd. (NASDAQ: VFS)	$6.33	57.1%
XPeng Inc. (NYSE: XPEV)	$14.33	20.6%

Topping that list is Nikola. Analysts anticipate the share price has lots of room to run. Does that mean the stock is undervalued? Or maybe one overzealous analyst has skewed the mean?

Why Invest in Nikola?

Nikola stock is down more than 99% from its 2020 initial public offering (IPO) share price. Most of that retreat occurred in the past three years. The company’s stated mission is to create solutions for a zero-emissions world by transforming commercial transportation. It has faced some challenges, including its founder and former CEO’s conviction for fraud. However, the company was awarded Arizona Forward’s Environmental Excellence Award for Technology Innovation last year.

Shares traded for above $240 apiece not long after the IPO. In the past month, the stock has tumbled about 73% to a little over $1 a share. Is the stock due for a rebound? What does Wall Street expect?

Nikola, the Company

This technology innovator and integrator engages in the provision of zero-emissions transportation and infrastructure solutions. It designs and manufactures heavy-duty commercial battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen fueling station infrastructure. Its products include the Nikola Tre Class 8 truck. Additionally, the company assembles, integrates, and commissions its vehicles in collaboration with its business partners and suppliers.

Nikola headquarters are in Phoenix, Arizona. The company was founded in 2015, and it went public in the summer of 2020. Competitors include the aforementioned EV makers and truck makers such as PACCAR Inc. (NASDAQ: PCAR), REV Group Inc. (NYSE: REVG), and Wabash National Corp. (NYSE: WNC).

The company reported record hydrogen fuel cell truck sales in its third-quarter results, and the CEO more recently said that plenty of opportunity exists for both hydrogen and electric trucks. However, revenue for the period was less than analysts had anticipated, leading to the recent pullback in the shares. Before that, the stock had been on the rise on strong demand for hydrogen-powered trucks.

Nikola, the Stock

While the share price recently fell to an all-time low of $1.08, the stock popped over 15% after New Year’s Day, well outperforming the S&P 500. Note that the $12.40 consensus price target is well above the current share price but also far below the 52-week high of $34.50.

Only one of seven analysts who follow the stock recommend buying shares. D.A. Davidson and TD Cowen maintained their Neutral-equivalent ratings back in November. Institutional investors hold more than 18% of the shares. BlackRock and Vanguard are among the top holders, though their stakes are well less than 3%. Almost 21 million shares, or over 25% of the float, are held short. Note that an executive sold a few shares last month.

Where Is It Headed?

Wall Street expectations for where the stock goes in the next 52 weeks vary but are all positive. Not only does the high price target suggest huge upside potential, but so does the consensus target.

Low target	$4.00	214.9%
Mean target	$12.40	916.4%
High target	$30.00	2,262.2%

That high target may seem out of reach, but it is less than the 52-week high and far less than the all-time high.

With the stock still not far off an all-time low, what’s with the enthusiasm for the stock? The company’s global head of sales recently hinted at changes coming next year for the company, including “a lot of big names.” He said, “This isn’t the end. This is just the beginning for us.” However, the company will have to find some momentum to stay ahead of the ongoing speculation about potential bankruptcy. Analysts are cautious when it comes to their ratings, yet they see plenty of upside potential.

Are Electric Cars Really Better for the Environment?

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.