Emerging technology stock pick: EVs batteries go mainstream

Andrew Willis: In the recent “10 for 2023” report from Sustainalytics, Martin Vezér and Poulomi Sengupta combed through Pitchbook and Sustainalytics to find you the stocks behind your next electric vehicle.

And we’re not necessarily talking about a Tesla or even Ford. With emerging technologies, expect an increase in competition, with the likes of Lucid (LCID) in the electric vehicle space being a great example. After a maiden product launch as recently as 2021, the company is moving fast – already signing a deal with Panasonic this last December to supply its EV batteries.

Getting the Japanese battery giant on board may have been a good move for the new luxury EV entrant. Lucid had to cut its 2022 production from 20,000 to around 7,000 vehicles on supply chain issues, which included a shortage of components and raw materials. The company could also use some help with product and service safety as Sustainalytics assess the firm’s related programs as weak. Safety is a primary growing pain for the electric vehicle industry, as we discussed on the topic of flying EVs. For Lucid, the report suggests regular testing of emergency procedures and external audits, among other precautions.

For such a new company, it is impressive that Lucid has a Product Governance risk rating lower than its EV peers – especially, next week’s company in our top 10. That EV stock has much more business to govern – including stations that give your car a fully-charged battery in only a few minutes.

For Morningstar, I’m Andrew Willis.