With encouraging government policies aimed at boosting the electric vehicle industry, we have seen a massive rise in the demand for EVs across the world. Governments are going all out to help with the adoption of EVs and automakers are here to make the most of the situation. There was a time when Tesla (NASDAQ:TSLA) was the only popular EV maker but several companies have become a part of the EV race today and this means there is a solid chance for EV stocks to gain in the coming years.

As per the S&P Global Mobility, electric vehicle sales in the U.S. could reach 40% of the total car sales by 2030. Besides China and the United States, several countries are catching up on the adoption of EVs and this means a higher global demand. Companies that can meet the rising demand at the right prices are set to benefit. With that in mind, let’s take a look at the three hidden gem EV stocks you need to know about.

EV stocks: Li Auto (LI)

EV maker Li Auto (NASDAQ:LI) is at the top of my list. LI stock is trading at $30 today and is up 42% year to date. Despite the inflation concerns and supply chain issues, the company has been able to stand strong in a very competitive market. Li Auto is giving stiff competition to many established players in the industry and its numbers are proof that the company is doing everything right.

The company makes one of the best-selling SUVs in China and it aims to triple its electric model lineup to 11 by 2025 and if it manages to do this, we will see LI stock going higher. It also plans to build 3,000 electric supercharging stations in China by 2025. Li Auto has enough liquidity to meet these goals while expanding production.

The EV maker reported a net income of $136 million and $2.74 billion in total revenues. That said, the company saw a 66% year-over-year increase in deliveries which hit 52,584 units and this is proof that there are buyers in the market who are ready to spend their money on Li Auto cars. The April deliveries stood at 25,681 and the company expects a big jump in the second quarter. It has $975 million in cash on hand and is growing profits. With strong guidance and an impressive lineup of models, Li Auto is a hidden gem in the EV segment.

Polestar Automotive (PSNY)

Polestar (NASDAQ:PSNY) is a Swedish company and it started trading in June 2022 after a merger with a special purpose acquisition company. Despite reporting impressive delivery numbers, PSNY stock has been struggling. It delivered 51,500 cars in 2022, up 80% year over year and the Q1 deliveries hit 12,076 cars, up 26% year over year. However, the management trimmed its guidance for 2023 and now expects to deliver 65,000 cars as compared to the earlier 80,000.

This led to a drop in the stock. PSNY stock is trading at $3.28 today and is down 68% over the year. Its lifetime high is $13.76 so there is ample upside potential from the current level. The stock looks undervalued to me and as the economy improves, we could see the company reporting better numbers. Even if it hits $7.5, it could imply 100% returns from the present level.

The management expects to see 60% growth in the current year and with that, we could see the losses narrowing. It also has an interesting product lineup and the production of Polestar 3 is expected to start next year. With new models and global expansion on the chart, Polestar looks like a solid bet at the current level. Cantor Fitzgerald analyst Andres Sheppard has an overweight rating on the stock with a price target of $7. The analyst is of the opinion that the rapid industry demand for EVs and the partnership with Hertz will benefit the company. I wouldn’t say the stock is without risks but it does deserve a spot on the watch list of investors who are betting on the future of EVs.

General Motors (GM)

Already an established name in the industry, General Motors (NYSE:GM) has several loyal customers and it is transitioning into the EV sector but at a slow pace. The company reported solid quarterly earnings and raised the full-year guidance. It announced an EPS of $1.21 and the revenue hit $39.99 billion. General Motors beat analyst expectations and now expects adjusted earnings of $11 billion to $13 billion, up from the previous guidance of $10.5 billion to $12.5 billion.

Its net income took a 19% drop but it is important to note that it is not because of a drop in sales or business but Voluntary Separation Program. Instead of laying off employees, the company offered a chance for its employees to be a part of the buyout program and this dented its bottom line in the quarter.

Despite delivering the results, GM stock took a downturn. The stock is trading at $32.37 today and is down 12% in the year. This is also a good entry point for investors who are looking for EV stocks to buy. The company has a dividend yield of 1.08% and a quarterly payout of 9 cents a share.

The automaker also expanded the U.S. battery cell production to ramp up its EV production and reached 20,000 EV sales in the U.S.  The company is thriving in what it does really well and as it continues to grow its market share, we could see better returns on the stock.

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.