2 Green Automotive Stocks to Buy and Hold Until 2030

The green transformation of our society is underway, but it would require a significant push in the Zero-Emission vehicle adaption to meet the current goals.

| More on:

In 2020, zero-emission vehicle (2030) sales only made up about 3.5% of the total vehicle sales. And according to the C.D. Howe Institute, about one-fourth of the overall vehicle sales would have to be ZEVs if the country is to meet the emission goals set by the federal government.

At the current pace, it seems highly unlikely that we might meet the emission goals. But a significant breakthrough in the battery technology or the energy density of Lithium-Ion batteries, which is still a far cry from gasoline and one of the reasons why electric vehicles are not as powerful as typical gasoline-based vehicles, can change the industry for decades to come.

The government is aiming to cut down about 213 megatonnes of greenhouse emissions by 2030. For reference, the emissions were about 730 megatonnes in 2019. Even though vehicles are only a part of the equation (other variables include different industries), they are still crucial. A typical vehicle releases about 4.6 metric tons of carbon dioxide a year in the air.

If the government starts incentivizing buying green vehicles over the years, to boost the sales numbers, green automotive manufacturers and associated businesses might see a significant boom.

A mobility technology company

Magna International (TSX:MG)(NYSE:MGA) is not an automaker per se, even though it has manufactured about 3.7 million vehicles in 30 different models. It’s more of a technology company that offers a broad spectrum of automotive solutions related to both body and power of vehicles. This places Magna in a unique place in the current automotive industry.

It’s at the forefront of the change that’s happening in the industry yet it’s not exposed to some of the risks and dangers a typical electric vehicle manufacturer might be exposed to. Mainly because it’s not fully invested in electric vehicles. Still, it can benefit from the demand for new and innovative solutions that will arise once more electric cars start rolling off production lines.

The 30 billion dollars (market cap) saw sales rising to 32.6 billion in 2020. It was one of the stocks that spiked after the crash and grew over 230% in about 15 months. The stock is normalizing a bit, and it’s quite attractively valued considering the growth it recently displayed. It’s also an 11-year old aristocrat that’s currently offering a modest yield of 1.7%.

A ZEV manufacturer

Another way the government can push the green initiatives is by switching to ZEVs for public and cargo transformation. And if a company like GreenPower Motor (TSXV:GPV) manages to land a sizeable order from the government, its sales could spike (and the stock might follow). The company’s production line comprises different passenger vehicles (including school buses) and cargo transportation that can carry up to 2,720 kg.

It has an impressive US presence and is heavily targeting the US school bus market. Last year, the company sold 68 vehicles, a drop compared to the ocean that is the mass transportation market turning to ZEV.

The stock has already seen an unnatural spike after the market crash, and it’s now in its cooling-off phase and trading at a 44% discount to its recent peak. You might consider waiting to buy it at a fair price and then let the green transformation work its magic.

Foolish takeaway

Both GPV and Magna can prove to be amazing growth stocks if the adaption of green vehicles picks up some serious pace. The market is moving in the right direction, just not fast enough. And if you can get an early jump, you might experience considerable growth by the end of the decade.

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.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Magna Int’l.

More on Dividend Stocks

open vault at bank
Dividend Stocks

Don’t Get Cute; Just Buy Stability: Top Defensive TSX Stocks to Buy Now

A healthy risk tolerance is essential for most investors, but many stray from the tried and tested, hoping to find…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

TFSA Investors: Buy These 3 Stocks for $3,480 Yearly Tax-Free Income

One significant benefit of a TFSA-based dividend income is that it doesn’t weigh down your tax bill.

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Are you looking for great income stocks? Here's a trio of high-yield dividend stocks that pay insane yields right now.

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Transform a $5,000 TFSA Into a $50,000 Retirement Nest Egg

The TFSA is a powerful tool that can grow a small investment into a substantial retirement nest egg over time.

Read more »

A meter measures energy use.
Dividend Stocks

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

Fortis has increased its dividend annually for the past five decades.

Read more »

analyze data
Dividend Stocks

3 Dividend Stocks That Are Screaming Buys in November

Here are three top dividend stocks long-term investors won't want to ignore during this part of the market cycle.

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

Generate $175/Month in Passive Income With a $30,000 Investment

Dividend aristocrats offer reliability, and many of them also offer generous yields. With sizable enough discounts, these yields can become…

Read more »

dividends can compound over time
Dividend Stocks

Best Dividend Stocks to Buy Now for Canadian Investors

These three stocks would be excellent additions to your portfolios, given their solid underlying businesses, consistent dividend growth, and healthy…

Read more »