Top Automotive Stocks To Watch Today In The Stock Market
Automotive stocks are seeing a renaissance in the stock market today as traditional automakers join the electric vehicle (EV) bandwagon. No doubt, newer entrants such as Tesla (NASDAQ: TSLA) or Lucid (NASDAQ: LCID) continue to make waves in the industry. While the former has established itself as the leader among electric vehicles, the latter appears to be hot on the heels with some compelling offerings of its own. At the same time, consumers are clamoring for the latest features in EVs.
On the other hand, the Biden administration continues to push for clean energy. Just last week, the President signed an executive order in which the federal government will aim to achieve net-zero greenhouse gas emissions by 2050. That demonstrates how serious the administration is in tackling the climate crisis. Under the order, the federal government will transition to 100 percent acquisition of zero-emission vehicles by 2035 for the federal fleet. This is a broad market shift that could fundamentally reshape the automotive industry.
While most of us may simply be focusing on pure-play EV manufacturers, we can’t ignore the fact that the old dogs are coming up with new tricks. With General Motors, Ford, and Volkswagen appearing to be going all-in with EVs, I can understand why many investors are eyeing these top automotive stocks. Of course, whether they will eventually grab a higher market share remains to be seen. But considering that these legacy automakers tend to be in a better financial position than the EV startups, you can certainly bet that the old guard will, at the very least, put up a good fight. With all that in mind, do you have this list of top automotive stocks to watch in the stock market heading into 2022?
Top Automotive Stocks To Watch Today
- Ford Motor Company (NYSE: F)
- General Motors Company (NYSE: GM)
- Volkswagen AG (OTCMKTS: VWAGY)
Ford Motor
With Ford Motor’s foray into the EV space with its Mustang Mach-E, investors are putting F stock back on their watchlist. Last week, Ford CEO Jim Farley said that the company plans to triple its production of the Mach-E starting in 2022. The goal is for production to reach more than 200,000 units per year for North America and Europe by 2023. This is testament to the ability of traditional automakers like Ford to carve a place in the EV market.
With the global chip shortage affecting the industry, Ford is not sitting idly by. The automaker inked a partnership with chipmaker GlobalFoundries (NASDAQ: GFS) last month to develop its own chips. Ford said the partnership gives the company more control over both the supply and the design of its chips. Could producing its own chips give Ford an edge over its rivals?
If that wasn’t enough, the company is also expanding its capabilities overseas as well. Ford is looking to invest $900 million towards upgrading its factories in Thailand, its largest investment in the country yet. This would provide support for plants that produce its industry-leading Ranger pickups and Everest SUVs. In the larger scheme of things, this would serve to further bolster the company’s capability to deliver on orders. Besides, Ford also reported its U.S. sales for November earlier this month. In particular, total sales of Ford’s EVs rose by more than 153% year-over-year to 11,116 EVs. Keeping all this in mind, could F stock be one of the top automotive stocks to watch in the stock market?
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General Motors
Another name to consider among top automotive stocks would be General Motors (GM). Similar to Ford, GM is steadily increasing its focus on EVs. Just last week, it was reported that GM will invest over $4 billion in two Michigan plants. It plans to convert its Orion Assembly plant in suburban Detroit into its hub for electric pickup trucks manufacturing. Additionally, the automaker intends to build a battery-cell factory near one of its assembly plants in Lansing. Unsurprisingly, GM stock is steadily gaining momentum as the automaker continues to make progress on the EV front, with gains over 50% this year.
GM’s EV ambition does not go unnoticed by the White House. President Joe Biden last month praised GM for taking the lead in the country’s EV manufacturing. The company also announced that it will start its Hummer EV deliveries this month. Called Edition1, the electric pickup truck will have a 329-mile range. For comparison, its nearest rival Rivian (NASDAQ: RIVN) R1T has a 314-mile range.
Last week, the company announced that it will be working with MP Materials (NYSE: MP) to source rare earth metals for its EV motors in North America. With this partnership, the company would have a more resilient rare earth supply chain. What’s more, GM raised its full year adjusted pre-tax profits forecast earlier this month to about $14 billion. The previous forecast was from $11.5 billion to $13.5 billion. With such optimism, would you be buying GM stock?
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Volkswagen
Volkswagen is an automotive giant from Germany. For those unfamiliar, its brand portfolio includes Audi, SKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, SEAT, and many more. The German automaker held a 26% share in the EV market in Europe in the first half of 2021. And it aims for more. The company said last week that it plans to invest $100 billion in EV technology in the next 5 years. Volkswagen said that the investment will cover a vast range of technologies, including digitization, robotic production and mobility services. With that, it seems that the company is resolutely driving forward its transformation toward electrification.
Moreover, Volkswagen managed to set a company record of EV deliveries in its third quarter despite the global chip shortage. It delivered 122,100 units of EVs from July to September, up 109% year-over-year. However, the chip shortage did have an impact on Volkswagen’s third fiscal quarter results. Revenue for the quarter was at $64.26 billion, down by about 4% year-over-year. Nevertheless, according to CFO Alexander Seitz, the company anticipates a return to a significantly positive fourth-quarter performance compared with the third quarter.
Earlier this month, reports said Volkswagen is mulling the initial public offering of its luxury sports car brand Porsche. This could help the former raise funds for its EV ambition. Analysts say that as a standalone company, Porsche could be worth between $51 billion and $102 billion. The company is also considering building a new factory for its fast-charging Trinity electric sedan. The sedan is scheduled to be introduced in 2026. Considering Volkswagen ambitious plans, would you add VWAGY stock to your portfolio?
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