It’s been a tough couple of years for the automotive industry. None of the major auto manufacturers were able to avoid the negative impacts of the COVID-19 pandemic, which tricked down to local businesses. From the major Chevrolet auto group to the mom-and-pop Hyundai dealer, it was rough.
2022 is expected to see a rise in the auto industry, but there haven’t been any major breakthroughs so far. With a perfect storm of inflation, high gas prices, and rising interest rates, it’s not exactly a market where auto sales are expected to thrive. The second quarter of 2022 might be a turning point, which means it could be a great time to watch the stock market for automotive stocks.
The Impact of Gas Prices
Gas prices are probably the most significant area that is impacting auto sales. The first group of consumers who will have to make a change is low-income shoppers who look for large, gas-guzzling trucks and SUVs.
Right now, the top three-selling trucks in the U.S. are the Ford F-150, Ram 1500, and Chevrolet Silverado 1500. All of these trucks have a fuel economy of fewer than 20 miles per gallon. As for SUVs, the top-selling Honda CR-V, Toyota RAV4, and Nissan Rogue all have a fuel economy of fewer than 30 miles per gallon.
As the price of fuel increases, gas-guzzlers will be harder for people to afford. You can expect these vehicles to start to drop in sales, and shoppers will look for more value in their rides. Instead of grabbing a RAV4, shoppers will stop by a Hyundai dealer to look at a more fuel-efficient Tucson. Instead of the F-150, shoppers might consider a Toyota Tacoma or Honda Ridgeline.
The Ride of The Electric Car
More drivers are interested in electric cars than ever before. Part of that is because newer models are coming out with some pretty amazing capabilities. The Ford F-150 Lightning can work as a whole-home generator, the Tesla Model S has a range of over 400 miles, and Hyundai dealer employees love boasting about the Hyundai Ioniq Ev’s semi-autonomous driving capabilities.
The wave of electric cars is coming. Nearly every major brand is jumping into the electric market. From electric pickup trucks to daily commuters to muscle cars, everyone is getting involved with hybrids, plug-in hybrids, and fully electric options.
Automotive Stocks You Should Watch This Quarter
Keeping in mind how eco-friendly vehicles are in higher demand more than ever, companies that invest in filling their lineups with efficient vehicles are going to come out on top.
Here are some stocks you should keep your eyes on:
- Tesla (TSLA)
- Hyundai (HYMTF)
- Ford (F)
- Rivian (RIVN)
- Toyota (TM)
The one commonality that you’ll notice between these brands is a full lineup of eco-friendly vehicles. From the endless hybrids available at your local Hyundai dealer to the innovative electric vehicles from Tesla and Rivian, the path to the future of the automotive industry is green.
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