While used auto prices are increasing faster than stocks worldwide, the auto sector is at a critical crossroads coming into 2022. Supply chain difficulties have restricted the number of new vehicles available for purchase, which has negatively impacted earnings for some of the industry's major players.
However, several experts believe that the semiconductor scarcity will not get any worse in the future. We may see some big earnings from the top names in the industry if automakers are able to produce even a fraction more than they did in 2021.
Investors should think about the growing demand for electric vehicles, which might benefit a variety of automobile manufacturers in the future. As this technology continues to develop, the entire industry will undergo a significant metamorphosis, and the fact that US President Joe Biden will be investing billions to hasten the widespread adoption of EVs should provide investors with ample encouragement to buy stocks.
A sustained economic recovery might also bring more consumer spending in 2022, another reason to add auto stocks to your portfolio. With that in mind, here are the top 3 automotive stocks for 2022:
Ford Motor Company (NYSE: F)
Ford Motor Company may have a bright future in 2022, owing to innovative new car debuts and an ongoing restructure strategy that is resulting in a leaner and more profitable firm. In the spring of 2022, Ford will debut its highly anticipated Ford F-150 Lightning electric truck, which has the potential to become an instant bestseller.
When reservations for the original version of the model nearly topped 200,000, Ford had to double the planned manufacturing. The Bronco, Mustang Mach-E EV, Expedition, and E-Transit are just a few of the new vehicles that add to a strong selection of new cars for customers and commercial clients to choose from in 2022.
Ford produces and sells its automobiles on six different continents, as well as offers financial services through Ford Motor Credit. The company's goal to cut debt on its balance sheet is a significant plus, as is the recent collaboration with semiconductor maker GlobalFoundries to assist boost chip production. Finally, Ford's recent reinstatement of its dividend is another indicator that the firm is making a comeback following years of uncertainty, making it one of the best auto stock picks for 2022.
Tesla (NASDAQ: TSLA)
If you're seeking for the best electric car, look no farther than Tesla. The company's industry-leading technology, stylish cars, and improving financial results have rewarded long-term investors in 2021, although there may be more room to grow next year as well. Despite the fact that Tesla's shares have taken a dive in recent weeks owing to CEO Elon Musk's sale of roughly 10% of his ownership stake in the firm, investors may breathe a sigh of relief since it appears he has completed the selling. It could also imply that Tesla stock is about to start the year on a high note, and there are a variety of reasons to be optimistic about the long-term prospects of the electric vehicle leader.
Investors should be inspired by Tesla's goals to reduce its battery costs by 56% in the next few years, which may further enhance the firm's market position. In addition, the company's manufacturing capacity will likely improve in 2022 with new plants in Texas and Germany. Tesla has several competitive advantages that may not be overlooked.
It's also difficult to conceive of other electric carmakers being able to duplicate Tesla's vast supercharger network anytime soon, which is yet another competitive edge for the company. Finally, Tesla's introduction of new vehicles like the Cybertruck, a semi-truck, and a more affordable electric vehicle, as well as a completely autonomous driving solution, may help its shares rise in 2022.
Goodyear Tire (NASDAQ: GT)
Finally, we have Goodyear Tire, a top tire manufacturer that is expected to have a strong year as the automobile sector continues to recover from the epidemic. With its repair and retreading centers, Goodyear is one of the most dominant players in North America, Latin America, China, and India. It's also an enticing electric vehicle alternative, as the firm just introduced a new tire that is expressly made for electric cars. Because of their quiet motors, electric vehicles generate a lot more noise from their tires on the road than conventional automobiles and so Goodyear developed tires tailored for these environmentally friendly vehicles.
The recent acquisition of Cooper Tire, on the other hand, has many investors excited because it should result in significant synergies over time. In Q3, Goodyear reported revenue growth of 42% year-over-year to $4.9 billion, which might be a sign of good things to come in 2022. One of the most underappreciated automotive stock selections for 2022, Goodyear may be an excellent buy-the-dip investment.