In this article, we discuss the 10 fastest growing auto stocks in the world. If you want to read about some more auto stocks, go directly to 5 Fastest Growing Auto Stocks in the World.
The auto industry is made up of companies that manufacture and distribute vehicles and vehicle parts. Public automotive companies are now increasing in number as many electric vehicle (EV) startups and suppliers have gone public through special purpose acquisition companies (SPACs) in the past few years. The electrification of the auto industry is nothing short of a revolution, and some of these start-ups will likely be major players in future. Automotive stocks can be important contributors to an investment portfolio because they rise and fall with consumer confidence, and can be useful indicators for economic trouble or a recovery.
Despite the automotive market suffering from the pandemic crisis, the vehicle sales in the US went down 38% during the 2020 lockdown, the market has now recovered well and continues to grow. The demand for EVs has increased as travel resumes worldwide and virus restrictions become a thing of the past. This increase has led to a dramatic shortage of chips, now essential to the manufacture of vehicles, driving down production but increasing overall prices, with mixed results for the auto industry across the globe.
Some of the top stocks in the auto sector include General Motors Company (NYSE:GM), Tesla, Inc. (NASDAQ:TSLA), and Ford Motor Company (NYSE:F), among others discussed in detail below. In addition to manufacturers in the US, car makers from Europe, Japan, and China are also leading players in the industry. In the first half of 2022, high-margin SUVs, trucks and luxury vehicles gained market share over other cars. In the second quarter of the year, electric vehicle sales rose 66% in the US.
In a macro drop where inflation and rising rates have battered the economy, the automobile sector has managed to resist pressures and post modest gains. Heading to 2023, the automotive industry will remain vulnerable to global headwinds due to the energy crisis, slower global demand and continued supply chain problems. An EIU report on automotive outlook 2023 shows that globally, new vehicle sales will remain flat in 2023 and new car sales will rise by 0.9% and new commercial vehicle sales will fall by 1.3% due to an expected recession.
However, the sales of electric vehicles are expected to be the bright spots, growing by 25% in the period. Analysts are also predicting that new car sales in western Europe will decline by about 3%, while they will fall by 2.4% in North America. EV sales numbers from emerging economies like Brazil, India, and Indonesia remain disappointing, accounting for less than 1% of the total market share and not registering a significant increase in 2022. This could change as more car brands, especially in Japan, transition to fully electric vehicles.
Another important trend that investors should keep in mind is that the emergence of new EV models and the extension in government subsidies for the sector will likely contribute to the EV boom across the world in the coming year. In the US and Europe, electric car sales are rapidly rising. EVs now account for nearly 5% of the car market share in the US. Norway and Germany remain the strongest European EV markets.
It is also noteworthy that the conversations around the automotive sector in the media tend to focus on the electric revolution in the industry and the pivot towards new energy vehicles by big carmakers. However, the used cars market barely gets any attention. This is surprising since used car sales have outstripped the sale of new vehicles in the United States over the past decade. This is another trend to be mindful of when investing in the auto space.
Our Methodology
The companies that have upcoming growth catalysts and operate in the auto sector were selected for the list. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by carlos aranda on Unsplash
Fastest Growing Auto Stocks in the World
10. Tata Motors Limited (NYSE:TTM)
Number of Hedge Fund Holders: 11
Tata Motors Limited (NYSE:TTM) designs, develops, manufactures, and sells various automotive vehicles. On December 1, Tata Motors reported that their passenger vehicle sales registered year-on-year growth of 55% with 46,425 units sold in November 2022 compared to 29,947 units over the same period the previous year. Exports for November 2022 stood at 388 units, registering a year-on-year growth of 130% compared to 169 units over the same period last year.
At the end of the third quarter of 2022, 11 hedge funds in the database of Insider Monkey held stakes worth $63.9 million in Tata Motors Limited (NYSE:TTM), compared to 8 in the previous quarter worth $45.4 million.
Among the hedge funds being tracked by Insider Monkey, San Francisco-based firm Think Investments is a leading shareholder in Tata Motors Limited (NYSE:TTM) with 802,493 shares worth more than $19.5 million.
Just like General Motors Company (NYSE:GM), Tesla, Inc. (NASDAQ:TSLA), and Ford Motor Company (NYSE:F), Tata Motors Limited (NYSE:TTM) is one of the fastest growing auto companies in the world.
9. Toyota Motor Corporation (NYSE:TM)
Number of Hedge Fund Holders: 12
Toyota Motor Corporation (NYSE:TM) designs, manufactures, assembles, and sells passenger vehicles, minivans and commercial vehicles, and related parts and accessories. The company recently reported that third quarter electrified vehicle sales totaled 111,713 for the firm, representing 21.2 percent of total year-to-date sales.
At the end of the third quarter of 2022, 12 hedge funds in the database of Insider Monkey held stakes worth $741.8 million in Toyota Motor Corporation (NYSE:TM), compared to 12 in the previous quarter worth $849.4 million.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in Toyota Motor Corporation (NYSE:TM) with 5.4 million shares worth more than $710.6 million.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Toyota Motor Corporation (NYSE:TM) was one of them. Here is what the fund said:
“Toyota’s (NYSE:TM) “kaizen” manufacturing philosophy is based on improving manufacturing by using “just in time” processes to eliminate waste and reduce inventory carrying costs. The company does not contemplate disruptive change that will dramatically lower costs and improve quality.”
8. Lucid Group, Inc. (NASDAQ:LCID)
Number of Hedge Fund Holders: 15
Lucid Group, Inc. (NASDAQ:LCID) is a technology and automotive company that develops electric vehicle (EV) technologies. The company said in a statement recently that it produced 2,282 vehicles at its Arizona factory in the third quarter. It delivered 1,398 vehicles to customers during the same period.
On November 10, R.F. Lafferty analyst Jaime Perez maintained a Buy rating on Lucid Group, Inc. (NASDAQ:LCID) stock and lowered the price target to $17 from $19, noting that the company’s two financing agreements and its asset-based loan of $1 billion should provide enough financial flexibility to commence its expansion.
At the end of the third quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $99.5 million in Lucid Group, Inc. (NASDAQ:LCID), compared to 16 in the preceding quarter worth $173.7 million.
7. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 20
Li Auto Inc. (NASDAQ:LI) designs, develops, manufactures, and sells new energy vehicles in the People’s Republic of China. On December 1, Li Auto revealed that it delivered 15,034 vehicles in November 2022, achieving record-high monthly deliveries and representing a 11.5% year-over-year increase.
On December 15, CLSA analyst Aaron Li maintained a Buy rating on Li Auto Inc. (NASDAQ:LI) stock and lowered the price target to $31 from $49, noting that the market is focusing more on profitability following the Fed’s rate hikes but there was strong momentum for the company.
At the end of the third quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Lucid Group, Inc. (NASDAQ:LCID), compared to 28 in the preceding quarter worth $1.4 billion.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder in Li Auto Inc. (NASDAQ:LI) with 17.2 million shares worth more than $396 million.
6. Stellantis N.V. (NYSE:STLA)
Number of Hedge Fund Holders: 25
Stellantis N.V. (NYSE:STLA) engages in the design, engineering, manufacturing, distribution, and sale of automobiles and parts. On November 3, Stellantis NV reported that its global sales of Stellantis' battery electric vehicles (BEVs) increased 41% year-on-year to 68 thousand units, and sales of low emission vehicles rose to 21,000 units year over year to 112,000 vehicles in the third quarter of 2022.
On October 14, Berenberg analyst Adrian Yanoshik maintained a Buy rating on Stellantis N.V. (NYSE:STLA) stock and lowered the price target to EUR 19 from EUR 21.
At the end of the third quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $905.5 million in Stellantis N.V. (NYSE:STLA), compared to 25 in the preceding quarter worth $714.6 million.
Among the hedge funds being tracked by Insider Monkey, Boston-based firm Arrowstreet Capital is a leading shareholder in Stellantis N.V. (NYSE:STLA) with 29 million shares worth more than $349.4 million.
In addition to General Motors Company (NYSE:GM), Tesla, Inc. (NASDAQ:TSLA), and Ford Motor Company (NYSE:F), Stellantis N.V. (NYSE:STLA) is one of the fastest growing auto companies in the world.
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Disclosure. None. 10 Fastest Growing Auto Stocks in the World is originally published on Insider Monkey.
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