5 Best Car Stocks to Buy in 2024

Summary: The automotive industry is expansive and profitable, attracting significant attention from investors and the general public. In this guide, we explore the 5 best car stocks to buy in 2024. The companies on our list are built on a resilient business model and put a strong focus on meeting the latest industry trends. To start buying car stocks, investors can register an account at an online stock trading platform such as eToro.

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What are car stocks?

Investors interested in car stocks should conduct thorough research on individual companies, considering factors such as financial health, market trends, and competition. The performance of car stocks can be influenced by various factors, including economic conditions, consumer preferences, and technological advancements in the automotive industry.

5 Best car stocks to buy in 2024

The rapidly evolving automotive industry presents an exciting opportunity for investors looking to capitalize on the growing demand for innovative technologies and the involvement of various car brands in the sports and racing industries. 

However, understanding the intricacies of this highly competitive industry is paramount, as it will help you gain a better perspective on which car stocks offer the most potential for long-term growth. Some of the key factors to consider include market trends, leading automakers, and the various challenges that the industry currently faces. By analyzing these elements, you can make more informed decisions about where to invest your money.

The top 5 car stocks to consider adding to your portfolio in 2024 are:

1. Volkswagen Group (FWB: VOW);
2. Stellantis (NYSE: STLA);
3. Ferrari (NYSE: RACE);
4. Ford (NYSE: F);
5. Toyota (NYSE: TM).

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1. Volkswagen Group

Volkswagen Group is one of the best-performing automakers in the world, boasting a diverse portfolio that features brands like VW, Audi, Lamborghini, and Bentley. As a leading player in the auto industry, Volkswagen is naturally investing in electric vehicles (EV) and other innovative technologies, which puts its stock in a good position to offer investors exposure to various innovative developments within the industry.

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2. Stellantis

Stellantis is another profitable company worth considering for your automotive stock portfolio. It is a result of the merger of Fiat Chrysler and Peugeot, and it owns well-known brands such as Ram, Jeep, and Dodge. Investors can expect potential growth opportunities as the company also plans to focus on electric vehicles and digital transformation.

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3. Ferrari

Ferrari is a luxury carmaker based in Maranello, Italy, known for its high-performance sports cars and unique, highly recognizable brand value. Investing in Ferrari can provide you with exposure to a lucrative niche market and the potential for stock returns due to the constant demand for their exclusive products. 

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4. Ford

Ford is a true veteran in the industry, often being hailed as the company that made automobiles affordable and available to the general public. Today, Ford is known for its luxury cars under the Lincoln brand, and it is aggressively expanding its investments in more innovative technologies (for example, electric vehicles). Ford stock has shown resilience and positive performance in recent years, which makes it a compelling addition to your automotive stock collection. 

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5. Toyota

Toyota is the largest carmaker in the world by the number of vehicles produced (approximately 10 million annually), and it is known for its investments in autonomous driving and fuel cell technologies. As a result, the company is well-positioned to benefit from the ongoing transformation in the auto industry. Investing in Toyota stock can provide you with a stable option that is backed by a long history of innovation and reliability.

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Where to buy car stocks?

Car stocks are easily accessible on online brokerage platforms. Our go-to brokerage is eToro, a popular platform with more than 30 million registered accounts and a range of robust features, including:

• Commission-free stock trading;
• Access to over 2,000 stocks from 17 different exchanges;
• The option to purchase fractional shares;
• A user-friendly platform that simplifies the trading experience.

Highly Rated Stock Trading & Investing Platform

• Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.

• 0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

• Copy top-performing traders in real time, automatically.

• eToro USA is registered with FINRA for securities trading.

30+ million Users

Get Started

Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Understanding car stocks

When considering car stocks for your investment portfolio, it’s essential that you develop a clear understanding of the various factors that drive their performance. 

For starters, you can consider factors such as:

• Market capitalization: Large-cap companies typically offer stability and substantial resources to weather industry fluctuations. However, smaller-cap stocks might come with better growth prospects;
• Revenue: Examining a company’s revenue will help you determine whether its market share is competitive. After all, consistent revenue growth over consecutive years could suggest strong future performance and a stable fan base;
• Profitability: Metrics such as net profit and earnings per share (EPS) can help you understand a company’s financial health and operational efficiency. Profitable companies are often better positioned to endure economic shifts, provide dividends, and reinvest in future growth opportunities;
• Broader industry: Aside from financial metrics, consider the competition and value in the automotive industry. Intense rivalry between automakers may impact their profitability and pace of growth. Naturally, car stocks with a competitive advantage are more likely to succeed in the long run.

Expanding opportunities in the automobile market

The automobile market is experiencing a dynamic shift. As an investor, you should keep an eye on the growth opportunities and emerging trends in this sector. 

Some of them include:

• Electric vehicles: The demand for electric cars is expected to skyrocket as consumers become more environmentally conscious; 
• Semiconductor and connectivity: The global auto industry relies heavily on the use of semiconductors for advanced features in modern vehicles. With the recent chip shortage easing, now might be a good time to invest in car stocks that have strong ties to semiconductor suppliers;
• Hybrids: Automakers are not only focusing on fully electric cars but also investing in hybrids and other electrification technologies. For instance, Ford Motor Company continues to innovate by expanding their popular F-Series pickup trucks and Mustang sports car lineups with electric and hybrid versions.

Risks and challenges involved with car stocks

As an investor, you need to be aware of the various risks and challenges associated with car stocks before making your investment decision. Some of the key risks you may face while investing in the automotive industry include:

• Chip shortage: In recent years, the semiconductor chip shortage has emerged as a significant risk and challenge for the automobile industry. With chips being vital components for modern vehicles, this shortage has disrupted the supply chains and production capabilities of major auto manufacturers;
• Supply chain issues: The automotive industry heavily relies on a complex, international network of suppliers. Unexpected events, such as natural disasters and political instability, can have a significant impact on car manufacturers, potentially reducing their ability to produce, market, and sell vehicles;
• Interest rates: Changes in interest rates can affect both automotive sales and overall investment decisions. Higher interest rates might cause potential consumers to reconsider purchasing new vehicles while also impacting the attractiveness of dividend-paying stocks, such as automotive companies;
• Competition: The automotive industry is marked by intense competition among numerous brands. With companies such as Tesla constantly innovating and introducing new products, car manufacturers must continuously invest in research and development to remain competitive in the long run;
• Changing Market Trends: The global market is shifting towards electric vehicles (EVs) and autonomous driving technology. Car companies that fail to adapt and grow in these areas might struggle to retain or increase their market share.

Staying informed and carefully considering the potential risks and challenges involved with car stocks can help you make more educated decisions and ultimately improve the performance of your investment portfolio.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about the 5 best car stocks to buy in 2024

Highly Rated Stock Trading & Investing Platform

• Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.

• 0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

• Copy top-performing traders in real time, automatically.

• eToro USA is registered with FINRA for securities trading.

30+ million Users

Get Started

Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD