The last 12 to 18 months has been disappointing for EV stocks. Some of the best names in this space have plunged. The reasons include overvaluation, supply-chain concerns, macroeconomic factors, and intense competition that is impacting growth. However, it seems that some of the best EV stocks are now trading at attractive valuations. With industry tailwinds likely to sustain beyond the decade, it’s a good time to consider exposure to these attractive names.

Recently, the White House proposed the strongest-ever pollution standards for cars and trucks. The idea is to accelerate adoption of EVs. Policy-focused action remains favorable globally, and there is ample room for EV adoption in the next 10 to 15 years.

I therefore believe that quality EV stocks are poised for HUGE returns in the coming years. Furthermore, a sharp rally from oversold levels is likely. Some of the best EV stocks discussed in the column can potentially surge by 100% in the next 12 months.

Li Auto (LI)

Li Auto (NASDAQ:LI) stock has outperformed its peers in the last 12 months. While most EV stocks have witnessed a deep correction, LI stock has traded sideways. Considering the business developments, I expect LI stock to surge higher in the coming quarters.

In the second week of May, Li Auto is expected to report Q1 2023 results. That’s a potential catalyst for a rally. For Q1, Li Auto reported deliveries of 52,584 cars, which was higher by 65.8% on a year-over-year basis. With strong growth, I expect healthy revenue and healthy vehicle margins.

It’s also worth noting that Li Auto has a strong pipeline of new EV models. The current portfolio includes Li L9, Li L8, Li L7, and Li ONE. With most of the models being introduced in the recent past, deliveries growth will be strong through 2023 and in the coming year. Li Auto also has strong financial flexibility to pursue aggressive retail expansion and investment in product development.

Polestar Automotive (PSNY)

Polestar Automotive (NASDAQ:PSNY) has remained weak for an extended period. The stock seems deeply undervalued and is poised for a strong reversal rally. Recently, Cantor Fitzgerald initiated coverage on PSNY stock with a target price range of $5.05 to $7.35. The higher end of the target would imply almost 100% returns from current levels.

There are reasons to believe that a sharp rally is impending. Polestar reported 80% year-over-year growth in vehicle deliveries for 2022. In the current year, the company is expecting 60% growth. With operating leverage, it’s likely that EBITDA level losses will narrow.

Polestar is also attractive considering the product line-up. The production of Polestar 3 is expected to commence in 2023 and Polestar 4 has been launched. New models along with aggressive geographic expansion will support deliveries growth. An entry into China is likely soon with the company unveiling Polestar 4 in Shanghai.

Solid Power (SLDP)

Among solid-state battery stocks, Solid Power (NASDAQ:SLDP) is a top name to consider. Needham considers SLDP stock as the best bet in the EV solid-state battery space and has a target price of $5 for the stock. This would imply more than 100% upside from current levels of $2.

Earlier this year, the U.S. Department of Energy announced $42 million of funding for 12 projects to strengthen the domestic supply chain for advanced batteries. Solid Power was among the recipients with an award of $5.6 million to develop nickel- and cobalt-free batteries.

In terms of positive business developments, the company expects to deliver EV cells to automotive partners for validation testing in 2023. The company has already commissioned the electrolyte production facility.

With the backing of BMW (OTCMKTS:BMWYY), the company is positioned to accelerate research and development for solid-state batteries. With continued progress, SLDP stock is likely to trend higher.

On the date of publication, Faisal Humayun 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.