5 best automotive stocks to buy for Q3 2023
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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 many of the best stocks in the sector continue to grow. 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?
Copy link to sectionOur 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 keep scrolling to learn more about each company.
| # | Stock ticker | Company name | Trade now |
|---|---|---|---|
| 1 | TSLA | Tesla | Trade Tesla 77% of retail CFD accounts lose money. |
| 2 | F | Ford Motor Company | Trade Ford Motor Company 77% of retail CFD accounts lose money. |
| 3 | RACE | Ferrari NV | Trade Ferrari NV 77% of retail CFD accounts lose money. |
| 4 | GM | General Motors Company | Trade General Motors Company 77% of retail CFD accounts lose money. |
| 5 | VOW | Volkswagen Group |
1. Tesla (NASDAQ: TSLA)
Copy link to sectionThe 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 sport utility vehicles – 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 electric vehicles manufacturer, and it is now one of the largest auto stocks 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.
77% of retail CFD accounts lose money.
2. Ford Motor Company (NYSE: F)
Copy link to sectionFord 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 companies 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 electric vehicles, 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.
77% of retail CFD accounts lose money.
3. Ferrari NV (NYSE: RACE)
Copy link to sectionFerrari 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 car stock 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.
77% of retail CFD accounts lose money.
4. General Motors Company (NYSE: GM)
Copy link to sectionGeneral Motors is one of the most valuable auto stocks 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 growth 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 from the automotive segment in the coming years.
77% of retail CFD accounts lose money.
5. Volkswagen Group (FRA: VOW)
Copy link to sectionA 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 Volkswagen AG’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
Copy link to sectionYou 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.
77% of retail CFD accounts lose money.
What is an automotive stock?
Copy link to sectionAn automotive stock is a publicly traded company’s shares in the auto or automotive industry. This includes car manufacturers and auto companies that produce passenger cars, light trucks, pickup trucks, commercial vehicles and related auto parts.
Major automotive stocks include legacy carmakers like Ford, GM, and Toyota and new companies like Tesla and Rivian, focusing on electric vehicles. The performance of auto stocks depends on factors like car sales, car production volumes, and demand from consumers and commercial customers.
Are car shares a good investment?
Copy link to sectionWhether car stocks are a good investment depends on the outlook for the automotive industry. Car sales are cyclical and tied to economic conditions. However, many analysts see opportunities, especially in electric vehicle stocks, as electrification disrupts the industry.
Car manufacturers are investing heavily in EVs and autonomous driving technology. This could benefit the share prices of companies leading these trends. Traditional carmakers face risks from falling demand for new vehicles with internal combustion engines. But major auto companies like Toyota and Volkswagen, which have hybrid and EV models, may be resilient.
Our analysts recommend selectively investing in auto stocks with solid exposure to emerging segments like EVs while avoiding companies primarily relying on gas car production.
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