Tesla Enters India: 1 Top Canadian EV Stocks to Buy and Hold in 2021

Tesla (NASDAQ:TSLA) is seemingly speeding up the plans to launch its cars in India. Here are some latest updates. Let’s also look at a TSX electric vehicle stock that could rally in 2021.

| More on:
Car, EV, electric vehicle

Image source: Getty Images

Tesla (NASDAQ:TSLA) is seemingly preparing to enter the Indian electric car market this year. A couple of days ago, Reuters cited a government document to report that the American electric vehicle (EV) maker “will set up an electric-car manufacturing unit in the southern Indian state of Karnataka.” The state government also confirmed the news without giving any further details about Tesla’s investment plans.

Tesla: Latest news

The news of Tesla’s intentions to open an electric car manufacturing plant in India came a month after it registered Tesla Motors India and Energy Private Limited — its India unit — in Bengaluru, India, on January 8.

The Elon Musk-led carmaker continues to be in the news this year. Last week, the company surprised everyone by revealing its huge US$1.5 billion investment in Bitcoin. The news triggered a buying spree in Bitcoin prices and took it to new record heights against the U.S. dollar. On Tuesday morning, Bitcoin was trading at US$49,100. The cryptocurrency posted its all-time high of US$49,938 earlier during the day.

After ending 2020 with solid 743% gains, its stock has already risen by about 16% in 2021 so far.

Surging electric vehicles demand

The demand for EVs and autonomous cars has risen sharply in the last few years. Tesla’s recent success reflects the huge growth potential that the EV industry offers. That’s one of the key reasons big automakers like General Motors (NYSE:GM), Ford (NYSE:F), and Volkswagen are heavily investing in the segment.

Last month, GM announced that it would exclusively sell electric vehicles by 2035, as the automaker plans to go carbon neutral by 2040. Similarly, Ford recently raised its planned investment in EVs and autonomous vehicles to US$29 billion through 2025. Out of this US$29 billion planned investment money, Ford has allocated nearly US$22 billion for EVs and the remaining US$7 billion for autonomous cars.

In 2020, Tesla’s revenue jumped by 28%. But other mainstream automakers — including GM and Ford — struggled with low vehicle demand amid the pandemic. While GM registered an 11% drop in its sales, Ford’s revenue fell by 19% last year. As a result, Ford’s adjusted net profits tanked by 66% for the year. Surprisingly, GM managed to report a minor 2% rise in its 2020 bottom line, despite lower revenue.

The demand for EVs is likely to accelerate further in 2021 onward, as more countries try to move away from gasoline cars due to rising environmental concerns. It will give a big boost to zero-emission vehicles like EVs. This creates a huge opportunity for the companies focusing on EV and autonomous vehicle technologies. Here’s one Canadian stock that could soar in 2021 as the demand for EVs rises.

Magna International stock

Magna International (TSX:MG)(NYSE:MGA) is an Aurora-based auto parts and mobility technology company. It makes most of its revenue by selling vehicle body exteriors and structures, power and vision-related parts, and complete vehicle assembly. Magna’s stock ended 2020 with 27% gains, and it has risen by about 10% this year so far.

In December, Magna partnered with LG Electronics to form a joint venture called LG Magna e-Powertrain. The newly formed joint venture will manufacture e-motors, inverters, onboard chargers, and e-drive systems for EVs. Magna already sells its electric powertrain systems to many automakers. Its new joint venture with LG is likely to expand its market share as an EV parts provider.

Final thoughts

Magna is likely to report its fourth-quarter results this Friday. Analysts expect its adjusted net profit to rise by 38.3% on a year-over-year basis to US$599 million. According to consensus estimates, its bottom line is likely to more than double in 2021. Magna’s strengthening EV segment offerings and its focus on mobility technology could trigger a long-term rally in its share prices. That’s why you may want to include its stock in your investment portfolio before it’s too late.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

David Gardner owns shares of Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool recommends Magna Int’l. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Tech Stocks

A person uses and AI chat bot
Tech Stocks

AI Where No One’s Looking: Seize Growth in These Canadian Stocks Before the Market Catches Up

Beyond flashy headlines about generative AI, these two Canadian AI stocks could deliver strong returns for investors who are willing…

Read more »

Data center servers IT workers
Tech Stocks

Better Buy: Shopify Stock or Constellation Software?

Let's dive into whether Shopify (TSX:SHOP) or Constellation Software (TSX:CSU) are the better options for growth investors in this current…

Read more »

nvidia headquarters with nvidia sign in front
Tech Stocks

Nvidia Just Delivered a Beat-and-Raise Quarter. There’s 1 Red Flag Investors Shouldn’t Ignore.

The chipmaker continued to benefit from robust demand for artificial intelligence (AI). But can it last?

Read more »

GettyImages-1473086836
Tech Stocks

Why Super Micro Computer Stock Is Soaring Today

The volatile stock is getting a boost from Nvidia.

Read more »

Snowflake logo in snowflake office on wall_snowflake-1
Tech Stocks

Here’s Why Snowflake Stock Skyrocketed Today

Shares of the data company are up 32% for the day.

Read more »

man touching magnifying glass button on floating search bar internet google search engine
Tech Stocks

Why Alphabet Stock Was Sliding Today

The parent company of Google is facing heat from U.S. regulators.

Read more »

chart reflected in eyeglass lenses
Tech Stocks

Top Canadian AI Stocks to Watch in 2025

Celestica (TSX:CLS) stock and another Canadian AI stock are worth watching closely this holiday season.

Read more »

Nvidia Voyager Headquarters
Tech Stocks

Why Nvidia Stock Rallied (Again) on Tuesday

The chipmaker is expected to report earnings this evening.

Read more »