Electric vehicles (EV) have been around way longer than we can imagine, from as early as the 19th century.

 

 

Electric vehicles (EV) have been around way longer than we can imagine, from as early as the 19th century.

 

 

Electric vehicles (EV) have been around way longer than we can imagine, from as early as the 19th century.

Electric vehicles (EV) have been around way longer than we can imagine, from as early as the 19th century. Interestingly, some of the first cars ever made were electric, with automakers actively exploring options for alternative fuel vehicles, including EVs. However, blame it on politics, or little advancement in technology, or cheap and abundant gasoline, the internal combustion engine won the battle. Fast-forward 100 years, and the tables have turned. EVs are the future of the automobile industry and electrification of a vehicle is now inevitable.

Advancement in technologies, stricter emissions and fuel-economy targets as well as increasing commercial viability of EVs — both in terms of affordability and charging infrastructure — are boosting the e-mobility market. According to IHS Markit, there were nearly 2.5 million EVs sold in 2020 globally and sales are likely to soar 70% in 2021. EVs are expected to witness a CAGR of 53% through 2025, representing 12.2 million annual EVs. No one wants to be left behind during this massive growth narrative. While auto biggies including Tesla TSLA, General Motors GM, Ford F are obvious bets to capitalize on the booming EV market, it would also be prudent to park your capital in a few auto parts suppliers who are actively electrifying their portfolio and are set to benefit from the EV revolution, no matter which automakers emerge as winners.

Below we have highlighted three auto parts suppliers and equipment providers that are set to thrive on the EV transition. The companies are focused on innovation and technology development, and expect that hybrid and electric technologies will bolster their top line, going forward. Ensure that you retain these stocks in your portfolio to reap handsome long-term rewards.

Meritor, Inc. MTOR: Meritor is actively engaged in medium-duty electrification programs. It is constantly securing new business wins, which are driving electrification revenues. Contracts with Lion Electric, Volta Trucks, Hexagon Purus and Autocar for the supply of electric powertrain augur ample growth visibility. We like the recent five-year agreement with Hyliion to provide electric subsystems for its Hypertruck ERX. The company is also working with Hino, which will be evaluating and testing Meritor’s e-powertrain for its development path to zero-emission vehicles. Additionally, investment in SEA Electric gives Meritor an opportunity to apply its expertise in electrification solutions for the medium-duty market. The company currently carries a Zacks Rank #2 (Buy) and has a Value Score of A. The Zacks Consensus Estimate for fiscal 2021 earnings and sales implies year-over-year growth of 118.7% and 28.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.