Auto stocks are some of the most popular investments among investors. They’re a popular choice because cars have been a staple of the human experience for decades.
Despite the recent global car-price slump, car stocks are still undervalued and offer a good dividend yield. The best companies to invest in are those that have solid earnings and sales growth, strong margins and are priced below their peers.
1. General Motors
General Motors (GM) is an auto manufacturer that is headquartered in Detroit, Michigan. It has manufacturing plants throughout the world and sells vehicles under various brands such as Chevrolet, Buick, Cadillac, GMC, Baojun, Wuling Motors, and DMAX. It is known for everything from SUVs to compact vehicles.
GM is known for its innovative technologies and automobiles. It also has a long list of suppliers that help produce its vehicles.
In 1903, a group of car manufacturers came together to form General Motors Corporation. The merger was led by William Durant, a director of the Buick Motor Company.
His goal was to build a strong and unified automobile firm that would be less susceptible to market fluctuations. He acquired Oldsmobile and Buick in 1903, and Cadillac and Oakland in 1909.
GM has been one of the leading American companies for decades. Its contributions range from the development of luxury cars to the production of military equipment during World War II.
Tesla, led by billionaire Elon Musk, is a leading global electric vehicle (EV) manufacturer. It has a variety of EVs on the market, including its Model 3, Model S and Model X.
The company also sells energy storage systems. Its most popular product is the Powerwall, a battery pack for the home that stores electricity.
Its business strategy has a heavy emphasis on rolling out charging stations to drive EV adoption. Despite being the world’s largest producer of EVs, Tesla faces production bottlenecks in its battery factory and has been unable to meet its own 500,000-car goal.
Moreover, Tesla’s management structure has changed over the years. Musk has commented in the past that he wants to restructure and flatten the company’s organizational structure, incorporating some of the characteristics of a flat span of control and a touch of unity of command.
3. Lucid Motors
Lucid Motors, led by automotive engineer Peter Rawlinson, is a new Tesla competitor that aims to build high-end electric vehicles. Its first vehicle is the Air, an electric sedan that takes on the Model S in several ways.
It has a factory in Casa Grande, Arizona, where it plans to build its first mass-produced vehicles. AMP-1 is the assembly plant, while a powertrain factory about six miles up the road produces modules, battery packs, inverters, drive units, and wunderboxes (the company’s unique charging unit).
Recently, Lucid made two executive hires with decades of global logistics experience: Evelyn Chiang as VP of Process Transformation, and Walter Ludwig as VP of Global Logistics. Their expertise will help smooth the company’s growing operations.
Rivian is an electric vehicle manufacturer that focuses on up-heaving the market for consumer pickup trucks and SUVs. Founded in 2009, the company has a main manufacturing plant in Normal, Illinois.
Rivian was founded by MIT mechanical engineering graduate RJ Scaringe, who remains its CEO. He originally wanted to build a sports car, but his plans were sidetracked when financial obstacles surfaced.
He refocused on building a truck and luxury SUV, which was eventually released to the public in 2018. The company has a new manufacturing plant set to begin construction in 2022 in Morgan and Walton counties, east of Atlanta.
Rivian is a stock to watch for investors who are interested in the growing electric vehicle market. It has a strong track record of raising funding from some of the most influential investors in the world, including Amazon, Blackrock, and T. Rowe Price.