Electric vehicle stocks have had a tough year, but don’t count them out just yet, according to Evercore ISI. Analyst Chris McNally said the past year has been a much-needed expectation reset for nascent EV players, such as Fisker , Rivian Automotive and Lucid Group . Their stocks are down more than 65% over the past 12 months. “We believe a select few of the formerly ‘high-flying’ EV stocks are primed for a measured return path to increased consumer & investor momentum as they push forward to mass production mid-decade onwards,” McNally wrote in an extensive note initiating coverage of the three EV makers. He said the companies will have rebirths like Phoenixes rising from the ashes, with Fisker, Rivian and Lucid each having unique positioning in the industry and the potential to become “major players over the next decade.” Each has separate, premium “go-to-market” niches within the growing EV market, he said. “Especially encouraging is the fact that each company is focusing initially on a realistic premium segment of the market, where EV cost parity will come quicker than mass market EVs as rising battery pack costs eat away at mass market margins for the likes of GM & Ford,” McNally said. “While this is only a temporary advantage, it will help Fisker, Rivian, and Lucid conserve (some) cash and begin to scale at an appropriate level in advance of mass market EVs being truly viable from a business perspective, 2025 onwards,” he added. Fisker Evercore ISI is most bullish on Fisker. It initiated coverage of the stock with an outperform rating and price target of $15, nearly 107% higher than where it closed Tuesday. Over the near term, Fisker can leverage its partnership with contract manufacturer Magna Steyr. Fisker develops and designs its vehicles in-house but outsources to Magna Steyr to build them. That will help the EV maker to avoid the $5 billion to $8 billion in capital funding Rivian and Lucid will need through 2026, said McNally. Fisker will likely need $400 million to $800 million in funding over the next year, he said. The company also targets share gains in a currently neglected EV space: well-styled, smaller SUVs with tech-forward features, he said. “We see 40-50% upside to ’23 revenue consensus and a path to ~40k deliveries, easing the negative sentiment surrounding the former SPAC and unlocking a higher valuation,” McNally wrote. There is also a lot of excitement over its new EV, Ocean, which began rolling off the production line in November. That could “help turn the stock from speculation into a real Rev/execution story,” McNally said. Fisker’s stock is down nearly 53% year to date. Rivian Of the three EV makers, Rivian is the largest and most well funded, and its R1T pickup has rave reviews, McNally said. He rates the stock as in line with positive bias and has a $35 price target, implying 21% upside from Tuesday’s close. He sees a catalyst path after revenue consensus for 2025 is fully reset. Right now he believes expectations are too high. “Then we would begin to see vertical integration & branding advantages take charge,” McNally wrote. If the year-end 2022 run rate at its Illinois facility implies stronger-than-expected production, investor confidence should increase in the near term, as well as in the midterm with the expected opening of its second plant in Georgia in 2025-2026, he said. Other positive catalysts include the securing of near-term funding, perhaps through a capital raise in 2023 or 2024, and ensuring its newest, more affordable R2 model launches on time in 2026. The stock is down 71% year to date. Lucid Lucid epitomizes an aspirational EV, McNally said. “Lucid has both extensive vertical integration & leading e-powertrain aimed at the ultra-premium EV segment with the debut Air Sedan ($80-150k) and plans for an even more premium Gravity SUV as well as a lower-cost CUV (TBD; ’27/28?),” he wrote. However, he initiated coverage with an in-line rating and slight negative bias, noting that “Lucid has a long way to go on both TAM [total addressable market] expansion & high funding needs.” His $12 price target implies nearly 23% upside from Tuesday’s close. “Lucid’s technology is best in class, but the path to capitalize on that isn’t yet clear,” he said. One key positive catalyst for the stock could be a new, lower-cost model being introduced earlier than 2027. Also, a clear understanding of Saudi Arabia’s $3.4 billion investment and the company’s offering to raise $8 billion could help boost optimism, he said. The stock is down more than 73% year to date. — CNBC’s Michael Bloom contributed reporting.