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Exploring EV Stocks under $5: A Beginner’s Investment Guide

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Written by Timothy Sykes
Updated 9/26/2023 22 min read

EV stocks under $5 have been all the rage. Electric Vehicles (EVs) are revolutionizing the automotive world. What’s unique about low-priced EV stocks is their appeal to investors seeking growth at a reasonable cost.

The rise of EVs is a manifestation of the world’s growing need for cleaner energy. Automakers like Rivian Automotive (NASDAQ: RIVN) and Geely Automobile Holdings Limited (OTCPK: GELYF) are jumping onto this bandwagon, creating a wide range of vehicles, from passenger cars to fleets.

Stay with me here because this article is your survival guide for trading in EV stocks under $5, essential for anyone looking to diversify their portfolio.

These are some of the questions you’ll answer by reading this article…

  • What Are EV Stocks and Why Are They Important?
  • What Are EV Penny Stocks and How Do They Work?
  • What Are the Risks Involved With Investing in EV Penny Stocks?
  • Are EV Stocks a Good Buy Right Now?
  • What Are the Top EV Stocks Under $5 to Watch?
  • How Do You Prepare to Trade in EV Penny Stocks?
  • What Are Brokerage Accounts and What Do You Need to Get Started?

Table of Contents

What Are EV Stocks?

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EV stocks represent companies engaged in the production and delivery of electric vehicles, batteries, and related services. Think Tesla, BYD, or Xpeng.

They reflect the growth, challenges, and potential of the EV industry. Companies in this sector are part of a revolution that’s transforming the traditional combustion engines market into a hub for sustainable energy solutions.

Investing in EV stocks is not just about buying shares in electric car companies. It involves understanding the entire ecosystem …

  • Battery production
  • Technologies supporting electric drivetrains
  • Renewable resources
  • Vehicle classes
  • Energy landscape

This sector is multifaceted and demands a comprehensive grasp of different factors influencing market trends.

Traders seeking to beef up their portfolio may find value in exploring energy stocks that align with the global shift towards sustainability.

For those interested: Here’s a guide to the top 6 energy stocks on my watchlist, offering insights into potential growth opportunities.

What Are EV Penny Stocks and How Do They Work?

EV penny stocks are shares in electric vehicle companies that trade under $5. Examples include Kandi Technologies Group Inc. and Workhorse.

These stocks are often considered high-risk investments due to their low price and volatile nature.

But for traders, they can offer huge profit opportunities. It’s different from investing, but it’s an important niche to explore.

There are traders like Jack Kellogg who’s made over $12.7 million from trading.

Investment IS IMPORTANT. But your strategy should align with the stocks you’re watching.

Trading on exchanges like Nasdaq or on the OTC markets, low-priced stocks can offer an affordable entry point into the EV market.

Why invest in EV penny stocks? Simple.

They provide an opportunity to tap into the burgeoning EV market without a substantial financial commitment. However, this approach requires careful analysis, and an understanding of the company’s products, plans, and market position.

Remember, investing in EV penny stocks is not about quick riches, it’s about strategic engagement with a rapidly growing sector.

Understanding the Appeal and Risk of EV Penny Stocks

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EV penny stocks have captured the attention of many investors, given the transformative shift towards clean energy.

These stocks represent a growing segment of the automotive industry, with companies like RIVN and Ride driving innovation. The appeal lies in the potential for significant revenue growth, the expansion of market share, and the chance to invest in the next big thing in the automotive world.

There are a ton of EV representations in the market.

However, risks are equally present. Many of these companies are in their early stages, and fluctuations in materials costs, government regulations, or consumer adoption can create volatility.

The recent IPO of Lordstown Motors Plus on the NYSE is a prime example, with the stock experiencing dramatic price changes.

Even for traders, the risk is substantial. Day trading can lead to substantial losses.

A 2019 study called “Day Trading for a Living?” looked at the success rates of Brazilian traders over a 2-year window, and found that 97% of traders with more than 300 days of active trading lost money. Only 1.1% earned more than the Brazilian minimum wage — that’s only $16 per day!

Therefore, any investor should consult with an investment advisor or consultant, review available data from trusted sources, and understand the unique dynamics of the EV industry before committing capital.

Why Invest in EV Penny Stocks?

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The appeal of EV penny stocks lies in their potential for substantial growth. Imagine investing in a promising startup like Lordstown Motors Corp. that’s poised to redefine the vehicle market.

These stocks provide access to innovative technologies, emerging markets, and new consumer trends, all for under $5.

Risks Involved With EV Penny Stocks

Investing in EV penny stocks is not without risks. There’s …

  • Market volatility
  • Regulatory challenges
  • Inherent uncertainties associated with startups

These are all substantial hurdles. While the potential for growth is exciting, the risks involved require a careful assessment.

Look at it this way: a company like Rivian Automotive may have promising plans and innovative products, but what about its production capabilities, financial health, or competitive positioning?

Always approach EV penny stocks with a critical eye, understanding the inherent risks, and aligning your investment decisions with your risk tolerance.

Are EV Stocks a Good Buy?

EV stocks, including penny stocks, have shown significant growth over the past few years.

From Tesla’s meteoric rise to NIO’s expansion in China, the sector’s prospects are promising.

But is it a good buy? The answer is not straightforward.

Evaluating EV stocks requires a thorough understanding of …

  • The industry
  • The companies’ development plans
  • Their financial health
  • Overall market trends

A wise investment in this sector depends on a thoughtful assessment, not a mere follow-the-crowd mentality.

Always base your decisions on factual analysis and sound judgment.

Unveiling the Top EV Stocks Under $5

My top EV penny stock picks for 2023 are:

  • NASDAQ: MULN — Mullen Automotive Inc. — The EV Penny Stock with No Shares to Short
  • NASDAQ: FFIE — Faraday Future Intelligent Electric Inc. — The EV Penny Stock That Also Wants to Be an AI Penny Stock
  • OTCQB: ABML — American Battery Technology Co. — The EV Battery Penny Stock Spiker

Keep reading for a full breakdown …

The range of EV stocks under $5 is wide, including promising companies like Canoo and Faraday Future.

The diversity offers traders a chance to tailor their portfolios according to their interests, risk tolerance, and goals.

But how do you choose the right stocks?

One of the keys to trading in this segment is staying informed. Regularly visit industry analysts, review financial statements, and keep an eye on market news.

Understanding the company’s products, growth prospects, and the competitive landscape will guide your investment decisions. A calculated approach, backed by thorough research, can open doors to potential rewards.

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist here!

1. Mullen Automotive Inc. (NASDAQ: MULN) — The EV Penny Stock with No Shares to Short

My first EV penny stock pick is Mullen Automotive Inc. (NASDAQ: MULN).

Talk about going from 250,000 to 0…

This EV penny stock has a bad habit of running out of available short shares. The company has a large float. But 10% short interest is something to watch out for — especially when the stock in question is a Reddit favorite.

Check out my Reddit watchlist here!

That means it’s at risk for a short squeeze.

Also, the Nasdaq has a $1 listing minimum, and MULN just made a major effort to get above that share price minimum… On August 28, the company announced CEO David Michery would receive 30 million shares valued at $100,000.

There’s something fishy going on here …

While MULN’s meme potential may have a stock army in the making, this likely won’t be enough to salvage the scraps of this nosedive.

But I never make the kinds of bets that newbie shorts are prone to — I just keep stocks like MULN on watch.

2. Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE) — The EV Penny Stock That Also Wants to Be an AI Penny Stock

My second EV penny stock pick is Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE).

FFIE isn’t a fan of putting all its eggs in one basket…

This EV penny stock has one foot in EV penny stocks and the other in AI penny stocks.

On May 30, FFIE launched its FF 91 2.0 Futurist Alliance — a $309,000 AI tech luxury car — which it bills as a game-changer in the EV industry.

At the same time, the company released its product aiHypercar+, which it plans to sell in the U.S. and China.

The stock has a history of spiking, despite its current bearish trend. It spiked back in January 2021 and in July 2022.

Try as they might, this company is no Tesla. But a 120% gain is nothing to scoff at.

As usual, the price fell down like the rest of these stocks. But thanks to the selloff, it’s in prime position to spike again.

And on September 13 the company announced Jason Oppenheim, an FF 91 2.0 FA owner, would show off his car at “Delivery Co-Creation Day”.

Keep the press releases coming!

3. American Battery Technology Co. (OTCQB: ABML) — The EV Battery Penny Stock Spiker

My third EV penny stock pick is American Battery Technology Co. (OTCQB: ABML).

ABML is a lithium-ion battery recycling powerhouse that extracts and recycles battery parts to lower waste.

You’ve got to pay attention to this stock’s habitual news-based hype and predictable fall… ABML has short-lived spikes in response to sensational news.

Though there isn’t any recent news catalyst to send this stock spiking, it’s always a good idea to keep a past runner like this one on the list.

It’s also a prime example of how you can make or break yourself in the trading world.

I’ve made $21,903 in total earnings trading ABML (click the link to see my individual trades).

That’s because I’m always ready for this stock’s periodic spikes.

Preparing to Trade in EV Penny Stocks

Before jumping into trading EV penny stocks, preparation is key. Start by understanding the market landscape, including leading players like TSLA and emerging companies like WKHS.

Evaluate sales trends, customer preferences, and technological advancements in electric vehicles. Consider consulting with financial advisors or investment consultants for tailored investment advice, particularly regarding tax implications.

Focusing on specific regions like California, Texas, or even Canada can offer insights into local adoption trends and government incentives. Ensure that your trading basis is grounded in thorough research, including studying company material, SEC filings, and industry analyses.

From there, establish a clear strategy, balancing potential profits against risks.

When preparing to trade in EV penny stocks, it’s essential to recognize that the stock market offers a diverse array of opportunities.

This knowledge enables traders to tailor their strategies according to their risk tolerance and financial goals.

For those new to trading or looking to broaden their understanding of various options, here’s an informative guide on different types of stocks, providing a comprehensive overview of the stock market landscape.

How Much Money Do You Need to Get Started with EV Penny Stocks?

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Entering the world of EV penny stocks doesn’t necessarily require a hefty amount. Even a few hundred dollars can get you started. But be mindful, the cost isn’t just about buying shares …

It’s also about understanding the fees, understanding your risk tolerance, and aligning your investment with your overall financial goals.

Your budget for investing in EV penny stocks should reflect your strategy, time horizon, and risk management. Never trade with money you can’t afford to lose, and always keep in mind the costs and fees associated with trading.

An informed, balanced approach is your path to potential success.

What Are Brokerage Accounts? And What Do You Need to Get Started?

A brokerage account is a necessary tool for trading EV penny stocks. It’s where you buy and sell shares, manage your portfolio, and access various investment tools.

Top brokers offer platforms that facilitate trading in a wide variety of stocks, including EV penny stocks.

To get started, you’ll need to select a broker-dealer that aligns with your needs. Consider the fees, trading tools, and customer support. The process usually involves an online registration, providing personal information, and depositing funds.

Remember, your choice of brokerage platform is as vital as your trade decisions, so choose wisely.

Should You Use the Same Platforms for Small Trades and Large Trades?

Using the same platform for both small and large trades depends on the broker’s offerings, your strategy, and your comfort level.

Some are better suited for penny stock trading, while others may cater to a broader range of investment options.

Consider …

  • Fees
  • Tools
  • The types of stocks you plan to trade.

Don’t hesitate to consult with an investment advisor to select the best platform for your specific needs.

Platforms for Trading EV Penny Stocks

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Choosing the right platform for trading EV penny stocks is a critical decision. Look for platforms that provide access to both NYSE and NASDAQ, where stocks of companies like RIVN, RIDE, and Club Car 411 are traded.

I use StocksToTrade, but there are a lot of options out there.

Assess the available tools and resources, including real-time data, advisory services, and educational materials, to enhance your trading experience.

Consider platforms that offer specific products related to the EV industry, such as ETFs or growth stocks.

While a platform with extensive coverage in North America may be ideal for some, others may prefer a focus on emerging markets. The availability of different trading options, such as Round Rock or VIA Motors, should align with your strategy.

Lastly, verify the transparency of the platform regarding fees, tax considerations, and regulatory compliance, ensuring a seamless trading experience with minimal surprises.

Choosing the right platform for trading EV penny stocks is a critical step in the investment journey. But beyond the platform, it’s equally important to identify the right stocks to trade.

Whether you’re a seasoned trader or a beginner, having a well-researched list of top stocks can guide your decisions. From EV stocks to technology giants, having a diversified portfolio can enhance potential returns.

If you’re looking for a curated list of promising stocks, consider exploring this guide on how to invest in 10 top stocks, providing insights into various sectors and investment opportunities.

What is the Best EV Penny Stock Trading Platform?

When it comes to trading platforms, StocksToTrade is first on my list. It’s a powerful trading platform that integrates with most major brokers.

I helped to design it, which means it has all the trading indicators, news sources, and stock screening capabilities that traders like me look for in a platform.

Grab your 14-day StocksToTrade trial today — it’s only $7!

As far as brokers, the “best” EV penny stock trading platform varies from investor to investor.

Factors like fees, trading tools, customer support, and ease of use contribute to this decision. Here are some platforms commonly used by investors in the EV sector:

  • E-Trade: Known for its powerful trading tools and research capabilities.
  • TD Ameritrade: Offers a user-friendly platform with a variety of investment options.
  • Interactive Brokers: A choice for experienced investors seeking robust trading capabilities.
  • Robinhood: A popular platform for newcomers with no trading fees.

Consider your trading style, investment strategy, and comfort level while selecting a platform.

Your choice should enhance your trade experience, not hinder it.

Addressing Concerns about EV Penny Stock Platforms

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Investing in the world of EV penny stocks involves dealing with trading platforms, and safety is a paramount concern. Let’s address some of the common questions and apprehensions about EV penny stock platforms …

Are EV Penny Stock Platforms Safe?

The safety of EV penny stock platforms depends on the broker’s reputation, security measures, and regulatory compliance.

Reliable platforms invest in top-notch encryption, regular security audits, and adherence to financial regulations. Before you commit to a platform, review its security protocols, regulatory compliance, and user reviews.

Always opt for platforms registered with recognized authorities like the SEC or FINRA, ensuring a secure trading environment.

Is the Money I Use to Trade on Investment Platforms Insured?

Yes, money held in brokerage accounts is typically insured by the Securities Investor Protection Corporation (SIPC) up to $500,000 in the United States.

However, this doesn’t cover potential losses from investment activities. It insures the funds against broker failure or fraud. Be sure to check with your chosen platform to understand their specific insurance and protection policies.

Key Takeaways

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  • Understanding the Landscape: EV penny stocks are part of an expanding and innovative industry but require a detailed understanding of market trends and specific companies.
  • Recognizing Risks and Rewards: While there’s potential for growth, investing in EV penny stocks comes with inherent risks. Informed decisions and risk management are key.
  • Choosing the Right Platform: Selecting a platform that aligns with your investment style, needs, and security requirements is crucial.
  • Emphasizing Research and Strategy: Regular updates, thorough research, and a sound investment strategy will guide your journey in the EV penny stock world.

Trading isn’t rocket science. It’s a skill you build and work on like any other. Trading has changed my life, and I think this way of life should be open to more people…

I’ve built my Trading Challenge to pass on the things I had to learn for myself. It’s the kind of community that I wish I had when I was starting out.

We don’t accept everyone. If you’re up for the challenge — I want to hear from you.

Apply to the Trading Challenge here.

Trading is a battlefield. The more knowledge you have, the better prepared you’ll be.

Do you trade EV stocks under $5? Let me know in the comments — I love hearing from my readers!

Frequently Asked Questions

Which Stocks Will Get Positive Results from the EV Generation of Cars?

Stocks benefiting from the EV revolution include not only automakers but also battery manufacturers, charging infrastructure providers, and technology companies.

Keep an eye on industry leaders, emerging startups, and companies supplying critical components to the EV industry.

Where Do You Get EV Penny Stocks From?

EV penny stocks can be purchased through various brokerage platforms that offer access to exchanges like NASDAQ or OTC markets.

Ensure the platform you choose supports the type of stocks you’re interested in, and it complies with necessary regulations.

EV companies offer huge opportunities right now. The sector is expected to grow to $800 billion by 2027. The share prices of some stocks will continue to grow.

What are the Best Trading Platforms for IRA Rollover?

For IRA rollovers, platforms like Fidelity, Charles Schwab, and Vanguard are often considered some of the best.

They offer a wide range of investment options, including EV penny stocks, with strong customer service and competitive fees. Assess your specific needs, investment goals, and preferences to choose the right platform for your IRA rollover.

What Makes IDEX, FUV, Solo, and Solectrac Popular Choices Among Affordable EV Stocks?

IDEX, FUV (Arcimoto), Solo (ElectraMeccanica), and Solectrac are considered attractive EV stocks under $5 for investors seeking to enter the electric vehicle market.

Their distinct features like Endurance, chassis design, and connections to well-known brands like Great Wall Motor set them apart as potential growth candidates.

This FAQ focuses on the characteristics and appeal of these companies.

How Does the Distribution and Increase in Profit Influence EV Stocks Like IDEX and Great Wall Motor?

The distribution channels and increase in profit margins play a significant role in the growth of affordable EV stocks like IDEX and Great Wall Motor.

Exploring the firm’s business strategies, number of subsidiaries, and additional assets can help a beginner understand the potential for gains in this market segment.

How Do Consumers and Customers Get Information and Notice about EV Stocks Like Solo and FUV?

Consumers and customers looking for affordable EV stocks under $5 like SOLO and FUV can find various information through videos and official notices from the companies.

This includes insights into chassis design, endurance, and investment opportunities, providing a comprehensive view for potential investors.

How Do Ohio’s Government Regulations and CBAT Impact Investment in EV Stocks?

Ohio’s government regulations and companies like CBAT (CBAK Energy Technology) can significantly influence the investment landscape for EV stocks under $5.

Understanding how local legislation and major battery manufacturers contribute to the industry can help beginner investors navigate this dynamic field.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”