The auto industry is made up of companies that manufacture cars, trucks, vans, and commercial vehicles, as well as those that supply automobile parts and service. While these companies are best known for producing passenger vehicles, some of them also make vans and trucks that transport packages and other cargo. Some of the largest and best-known car industry companies include Tesla Inc. (TSLA), now the world’s largest automaker by market value, Toyota Motor Corp. (TM), and General Motors Co. (GM). Car stocks as represented by the First Trust Nasdaq Global Auto ETF (CARZ) have outperformed the broader market. CARZ has provided a 12-month trailing total return of 50.8%, far ahead of the Russell 1000’s total return of 22.2%. These performance figures are as of December 8 and all statistics in the tables below are as of December 9.
Here are the top 3 car stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Car Stocks
These are the car stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Car Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Toyota Motor Corp. (TM)||138.74||194.0||14.7|
|General Motors Co. (GM)||43.80||62.7||19.7|
|Volkswagen AG (VWAGY)||19.22||96.4||20.7|
- Toyota Motor Corp.: Toyota is a Japanese company best known for manufacturing, selling, leasing, and repairing passenger cars, trucks, and buses. Additionally, the company sells financing services, intelligent transportation systems, homes, and pleasure boats. For H1 FY 2021 ended September 30, Toyota reported a 25.9% year-over-year (YOY) decline in sales revenues and a 46.7% YOY drop in net income. The company also said that it had suspended, or would temporarily suspend, production of automobiles and components at some of its plants due to the COVID-19 pandemic.
- General Motors Co.: General Motors designs, builds, and markets cars, parts, trucks, and crossover vehicles for customers globally. Additionally, the company offers various protection, accessories, maintenance, and financing services.
- Volkswagen AG: Germany-based Volkswagen makes and sells economy and luxury automobiles as well as trucks, commercial vehicles, and sports cars. The company sells its vehicles worldwide. In November, Volkswagen announced that it would accelerate its investments and plan to become what it calls a “digital mobility company.” The plan calls for increased investments in the next five years totaling about €73 billion ($88.5 billion) on vehicle electrification, hybrid powertrains, and digital technology.
Fastest Growing Car Stocks
These are the car stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Car Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|BYD Co. Ltd. (BYDDF)||23.65||64.5||3,040|
|Ford Motor Co. (F)||9.25||36.8||445.5|
|General Motors Co. (GM)||43.80||62.7||73.8|
- BYD Co. Ltd.: BYD Co. builds automobiles including commercial vehicles, passenger cars, and other vehicles. The company also provides rail transportation construction services, automotive batteries, and related products. BYD is based in China.
- Ford Motor Co.: Ford designs, builds, and services passenger vehicles and trucks. Additionally, Ford offers financing, leasing, and insurance services through a subsidiary. Ford recently reported that total sales (trucks, SUVs, cars) for the month were down by 20.9% YOY, including a 39.1% plunge in car sales. Ford said the declines were caused largely by lower inventories and consumers sheltering at home amid the pandemic. November also had one less weekend in the month relative to November of 2019.
- General Motors Co.: See above for company description.
Car Stocks With the Most Momentum
These are the car stocks that had the highest total return over the last 12 months.
|Car Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|NIO Inc. (NIO)||46.56||63.4||1,960|
|GreenPower Motor Company Inc. (GP)||21.99||0.4||1,550|
|Tesla Inc. (TSLA)||649.88||616.0||867.4|
|First Trust Nasdaq Global Auto ETF (CARZ)||N/A||N/A||50.8|
- NIO Inc.: Chinese company NIO builds and sells electric vehicles and parts. NIO also offers a range of battery services, including battery charging and battery swapping. In November, Nio delivered a total of 5,291 vehicles, up 109.3% YOY. The company plans to accelerate production through the end of the year to meet rising orders from customers.
- GreenPower Motor Company Inc.: GreenPower Motor Company is a Canada-based electric vehicle maker. The company designs, engineers, builds, and sells zero-emission vehicle city transit electric buses as well as bikes. For fiscal Q2 2020 ended September 30, GreenPower reported revenue of $2.8 million and a gross profit of 31.2% of revenue. The company announced plans to dramatically boost production to meet rising demand for several of its vehicle models.
- Tesla Inc.: Tesla, the world’s largest carmaker by market value, designs, builds, and sells electric vehicles and electric vehicle powertrain parts. Tesla sells vehicles directly to consumers and powertrain components to other automobile manufacturers.
YCharts. “YCharts.” Accessed Dec. 9, 2020.
Toyota Motor Corp. “FY2021 2Q Financial Results,” Pages 3-5. Accessed Dec. 9, 2020.
Volkswagen AG. “Volkswagen Group raises investments in future technologies to EUR 73 billion.” Accessed Dec. 9, 2020.
Ford Motor Co. “Ford US Sales, Inventory, and Production for November 2020,” Page 1. Accessed Dec. 9, 2020.
NIO Inc. “NIO Inc. Provides November 2020 Delivery Update.” Accessed Dec. 9, 2020.
GreenPower Motor Company Inc. “GreenPower Reports Fiscal Second Quarter 2021 Financial Results.” Accessed Dec. 9, 2020.