Schaeffler And 2 Other EV Stocks To Watch

Oil supplies look fragile as attacks on shipping in the Gulf and the Strait of Hormuz raise costs and keep energy prices elevated. That keeps pressure on combustion engines and puts extra attention on transport that uses less fuel. Investors scanning for potential long term beneficiaries are increasingly looking at businesses building electric cars, batteries and components. This article highlights three such stocks from our electric vehicle focused screener.

The three stocks below are just a sample, and the full screen surfaced 48 more EV related companies with similarly detailed stories that are not covered here. To go straight to the source, analyze the full list and identify your own highest conviction ideas through the EV Stocks screener.

Schaeffler (XTRA:SHA0)

Schaeffler is a broad-based industrial supplier for autos and machinery. Its dedicated E-Mobility division plugs it directly into the EV value chain through electric drives, power electronics and battery related components.

Schaeffler generated about €8.6b from Powertrain & Chassis, €6.3b from Bearings & Industrial Solutions, €5.2b from EV focused E-Mobility and €3.0b from Vehicle Lifetime Solutions, with smaller revenue in Others, and the group is valued at roughly €6.0b by market cap.

For EV focused investors, the appeal is that Schaeffler does not only supply finished parts for traditional cars, it also sells critical components that sit inside electric drivetrains, battery systems and related industrial applications.

"Strong growth in E-Mobility (+10% sales in Q2, substantial outperformance vs. BEV market, and high quality/order intake like the new Chinese NEV contract) signals Schaeffler is successfully capitalizing on the shift to electrified mobility, which should drive top line expansion and improved gross margins."

How far that EV story goes now largely hinges on how one less visible funding constraint shapes future pricing power and margin quality.

That funding constraint is exactly what sits at the heart of the full narrative for Schaeffler, where pricing power, capital intensity and execution risk start to separate Schaeffler from the wider auto supply pack.

DENSO (TSE:6902)

DENSO is a global auto parts supplier. Its EV angle comes from powertrain systems for electric, hybrid and fuel cell vehicles, plus heat pump air conditioning and battery cooling hardware. It generated about ¥4,500b in Japan, ¥2,010b in North America and ¥2,010b in Asia, and is valued at roughly ¥4,614b.

DENSO ties directly into the EV theme through powertrain systems and thermal management that sit inside electric cars, from traction inverters and motors to heat pumps and battery coolers. Investors focused on the EV supply chain may find that the key question now is how one pressure shapes future returns on all that electrification spend.

That pressure point makes it worth scanning the 3 key rewards and 1 important warning sign to see where DENSO’s electrification push could accelerate or quietly squeeze returns.

Littelfuse (LFUS)

Littelfuse is all about protection and control hardware that keeps modern electronics, vehicles and industrial systems safe, which puts its EV ready high voltage fuses and battery protection parts squarely in the flow of electrified transport.

Littelfuse generates about US$1.47b from Electronics, US$688 million from Transportation and US$455 million from Industrial solutions, and the stock is valued at roughly US$11.5b.

For EV focused investors, the interest is that Transportation’s high voltage fuses, battery cable protectors and related safety components plug directly into electric vehicle battery packs and powertrains, even though the wider electronics portfolio still drives most of the top line.

"Expanding adoption of high voltage architectures in data centers, grid and transportation applications is expected to increase Littelfuse content per system, with management targeting a 25 to 30% data center revenue CAGR over five years and citing 2 to 4 times higher content in future high voltage systems, which can support revenue growth and earnings."

The real swing factor is how one quiet shift in where Littelfuse focuses its highest value content ends up feeding through to margins and cash generation.

That quiet shift is exactly what the full narrative for Littelfuse unpacks, showing where Littelfuse’s EV exposure could be accelerating, masking risk or reshaping long term cash generation.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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