Best automotive stocks to buy in 2022
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The automotive sector is one of the largest industries on the planet, weighing in at over $3.5 trillion. As a result of this scale, it is one of the most popular markets to invest in and it continues to evolve. This page guides you through the best automotive stocks and explains why automotive shares may be a good investment.
What are the top automotive stocks to buy?
Our analysts have compiled their list of the top 5 automotive stocks below. You can click on the company’s ticker to find out its latest price information, or you can keep scrolling to learn more about each company.
|#||Stock ticker||Company name||Trade now|
|2||F||Ford Motor Company|
|4||GM||General Motors Company|
1. Tesla (NASDAQ: TSLA)
The renowned electric vehicle manufacturer and innovator was founded by the enigmatic Elon Musk on 1st July 2003, and it has come a long way since the first Tesla Roadster rolled off the production line in February 2008. The technology has come on leaps and bounds, with Tesla’s battery range, accelerating performance, supercharger network and autopilot tech all setting it apart from the rest.
The company has a diverse lineup of electric vehicles that no other company can match. This includes an executive-focussed Model S, a family SUV – the Model X – and a soon-to-be-released supercar – the Tesla Roadster. Add to this a sport utility vehicle – the Model Y – and most importantly, the affordable Model 3, Tesla now appears primed to consolidate its sky-high market valuation with sales figures to match. In fact, the Tesla Model 3 quickly became by far the world’s best selling EV in 2020, shifting just under 400,000 units.
The Tesla brand has grown faster than any other vehicle manufacturer, and it is now one of the largest automotive companies on the planet, even amongst internal combustion engine (ICE) manufacturers. It is this enormous growth – around 3,000% in the last five years – that has earned Tesla the top spot on our list.
Find out more about investing in Tesla with this guide.
2. Ford Motor Company (NYSE: F)
Ford is a truly renowned brand, and it is perhaps most famous for creating the first mass-produced car, the Ford Model T. Founded in 1903 and based in Dearborn, Michigan, it is one of the world’s largest automotive manufacturers and has an excellent reputation for both reliability and affordability.
The company has a diverse range of extremely popular vehicles, with cars for every segment – whether it is an affordable hatchback in the Ford Fiesta, an American muscle car in the Ford Mustang, or an all-out performance vehicle in the Ford GT. In addition, Ford has equipped itself well for the rise of EVs, aiming to produce 600,000 EVs by 2023 including some unique and interesting cars like the Ford Mustang Mach-E.
The price of F shares has surged enormously in the last year, and this growth has demonstrated Ford’s ability to capture consumer interest as COVID-19 lockdowns end around the world. However, what really sweetens the deal – and the key reason Ford is on this list – is the bonus of a 2% dividend yield.
Learn everything you need to know about investing in Ford in this guide.
3. Ferrari NV (NYSE: RACE)
Ferrari couldn’t really have a more apt company ticker. Founded in 1947 and headquartered in Maranello, Italy, Ferrari designs, engineers, produces, and sells luxury performance sports cars. The company also provides racing cars, and it is the only company on this list with its own team in the world’s most popular racing series: Formula 1.
Ferrari is an extremely unique company, especially on this list. It is a powerhouse for selling merchandise, from caps to keyrings, and the company even licences its brand to a variety of luxury and lifestyle goods manufacturers. Moreover, its brand is the basis for two theme parks: Ferrari World in Abu Dhabi, and Ferrari Land in Portaventura. When it comes to brand strength, no other automotive company compares to Ferrari and its famous red supercars.
When it comes to financial performance, Ferrari has been an extremely impressive company in recent years. Its share price is up well over 300% in the last 5 years, and this has been driven by surging revenue, which now stands at around $5 billion each year. This growth and Ferrari’s international appeal has allowed the company to secure a spot in our top 5.
4. General Motors Company (NYSE: GM)
General Motors is one of the most valuable car companies on the planet, selling around 8 million cars per year. Founded in 1908 and headquartered in Detroit, Michigan, the company offers a varied lineup of cars, trucks, and crossovers, and it also sells automobile parts.
The company’s growth has been solid and consistent if not spectacular when compared to other options on this list. However, GM’s revenue remains one of the most impressive stats on this list, standing at around $120 billion every year.
The key reason GM is on our list is its aggressive EV strategy, with a commitment to producing 30 new global electric vehicles by 2025. GM has always been at the forefront of the industry in terms of technology, and with the experienced leadership of CEO, Mary Barra, and over 150,000 employees ready to deliver on this strategy, the company appears poised to profit from ever-rising EV demand in the coming years.
5. Volkswagen Group (FRA: VOW)
A list of the top five best automotive stocks wouldn’t be complete without one of the world’s most well-known brands, VW. Incorporated in 1937 and based in Wolfsburg, Germany, the company is consistently either the first or second most popular automotive manufacturer on the planet, selling over 10 million cars primarily in Europe, North America, South America, and the Asia-Pacific.
The companies revenue is unrivalled on this list, standing at over $250 billion annually. This has powered the company to a market cap of over $100 billion achieved through consistent, solid growth.
However, the key factor that has secured VW’s position is its dividend yield of over 3% – the highest on this list, and a welcome reward for value investors looking for some stability in their portfolio.
Where to buy the best automotive shares
You can purchase automotive shares through an online broker. We have listed our favourite ones below, and you can simply click on one of the link to sign up immediately. Otherwise, keep scrolling to find out more about automotive stocks.
What is an automotive stock?
Let’s break this down into two parts. An automotive company is a company that operates in the automotive industry – this includes vehicle development, production, sales. A stock is a portion of ownership in a publicly listed company. Combining the two together, an automotive stock is a tradeable portion of a publicly listed company that operates in the car industry.
Are automotive shares a good investment?
Fundamentally, yes. People need to get around, regardless of where they live, and in most locations, cars are the most viable method of transport. Moreover, internationally, there are nearly 1.5 billion vehicles, and a further 80 million are sold each year. This underlines the scale, strength and durability of the car market.
In bearish economic conditions, automotive stocks can often fall because consumers have less purchasing power for new cars. However, COVID-19’s impact on the global supply of semiconductors has caused the used car market to surge, demonstrating that even in difficult times, automotive stocks can experience growth. In addition, while some budget vehicle manufacturers have struggled with a tail-off in demand due to the struggles of their targeted demographic, luxury vehicles haven’t suffered quite the same fate.
The automotive sector is currently in a period of revolution, with electric vehicles (EVs) coming to the fore of a new environmentally focussed era. Whether our companies are able to maintain their place on this list will rely on their ability to build a strong, compelling EV division, and to slot neatly into the growing infrastructure on offer.
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