Forget Tesla! Buy This Small EV Growth Play Instead

Here’s why I think Plug Power (NASDAQ:PLUG) and Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) could be better than Tesla Inc. (NASDAQ:TSLA).

Tesla (NASDAQ:TSLA) has had a great run in the past year. However, this is a stock that appears to be losing momentum right now.

Why?

It appears the market is pricing in competition and other disruptive technologies like hydrogen-powered EVs into valuations in the traditional EV sector. Accordingly, for speculators in this sector, I have a top pick to consider today. I think on a purely speculative basis Plug Power (NASDAQ:PLUG) is a stock with the potential to outperform Tesla this year.

Hydrogen fuel cells have potential to disrupt EV market

With the world turning toward clean energy sources, the hydrogen economy is believed to be on the cusp of unprecedented expansion. Since hydrogen is the lightest element, it surpasses every other renewable energy source in terms of recharging time, emissions, etc.

It appears that hydrogen fuel cells (HFCs) are on the verge of disrupting electric car batteries. Importantly, Plug Power is at the heart of this disruption. It provides HFCs to reputed warehouse operators, like Walmart and Amazon. Furthermore, Plug Power is now trying to collaborate with renowned companies, like Renault, to provide industry-leading HFC solutions.

It is believed within the next 20 years, the company’s HFCs will be used across all verticals of the hydrogen economy. Indeed, data centres and vehicles, including trucks and forklifts, could be powered by HFCs.

Plug Power signs a new deal to produce green hydrogen

Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) has agreed to supply Plug Power with hydroelectricity from its Holtwood Power Plant in Pennsylvania to produce green hydrogen. It is estimated that this deal will enable Plug Power to produce 10 tons of green hydrogen per day. Utilizing emission-free renewable energy is going to be key to ensuring the viability of this sector long term.

Furthermore, this agreement takes Plug Power one step closer to its objective of producing 50% of its hydrogen by utilizing renewable sources within 2024.

BEP’s Holtwood hydro site is in line to become the first company to power electrolyzers that belong to Plug Power’s network of green hydrogen. Thus, it appears that Brookfield stock is a great option for investors to play Plug Power indirectly.

Environmentalists believe that green hydrogen will be a dominant clean energy source for transportation and industrial heating. Zero-emissions targets are becoming more important to governments everywhere. Therefore, the potential of Brookfield Renewable’s green hydrogen production is impressive.

Bottom line

The world is transitioning toward green energy. Accordingly, Plug Power and Brookfield are two stocks with incredible upside right now.

I would encourage investors to take a hard look at these two names today. After all, they could represent the future we’re looking for.

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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Chris MacDonald has no position in any of the stocks mentioned. David Gardner owns shares of Amazon and Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of and recommends Amazon and Tesla and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.

More on Energy Stocks

sources of renewable energy
Energy Stocks

Canadian Renewable Energy Stocks to Buy Now

Renewable companies in Canada are currently struggling through a challenging phase, but quite a few of them are still worth…

Read more »

oil pump jack under night sky
Energy Stocks

Is CNQ Stock a Buy, Sell, or Hold for 2025?

CNQ stock is down in recent months. Is a rebound on the way next year?

Read more »

a person looks out a window into a cityscape
Energy Stocks

2 No-Brainer Energy Stocks to Buy With $500 Right Now

Two low-priced energy stocks can reward investors who have limited capital with far superior returns than expensive peers.

Read more »

canadian energy oil
Energy Stocks

Where Will Suncor Stock Be in 1 Year?

Suncor Energy Inc (TSX:SU) stock is doing well this year. Will it still be doing well next year?

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Best Stock to Buy Right Now: Cenovus vs Baytex?

It may not seem like a good time to buy most energy stocks, but there are always exceptions.

Read more »

A bull and bear face off.
Energy Stocks

Dividend Investors: Top Canadian Energy Stocks for November

These three dividend-payers are on a bullish uptrend.

Read more »

analyze data
Energy Stocks

Buy 8,850 Shares of This Top Dividend Stock for $2,000/Month in Passive Income

Let's do the math on what it would take to generate $2,000 a month in passive income from Enbridge (TSX:ENB)…

Read more »

oil and gas pipeline
Energy Stocks

Is TC Energy Stock a Good Buy?

TC Energy stock has a lot going for it, but there are also a few red flags to consider before…

Read more »