7 Auto Stocks to Leave in the Lot

  • Auto stocks are some of the most interesting opportunities out there
  • Arrival (ARVL) is hoping its unique vertically integrated manufacturing approach and its commercial vehicle niche can save it.
  • General Motors (GM) has the size and brand recognition to really make a splash in EVs but isn’t firing on all its cylinders in the EV or conventional market.
  • Honda (HMC) has also been remarkably silent on the EV front and continues to hope its badges will keep it in the running moving forward.
  • Lion Electric (LEV) is a Canadian EV maker in the urban truck and bus segments with hopes that it can open its sales across the nation and its borders.
  • Proterra (PTRA) focuses on electric busses as well as it component systems, like its battery packs and charging stations, as well as its electric drive trains.
  • TuSimple (TSP) doesn’t focus on the vehicles as much as the autonomous driving and an Autonomous Freight Network that would be devised for long-haul interstate or regional trucking.
  • Cenntro Electric Group (CENN) has five models of electric trucks ranging in size from a utility task vehicle (UTV) to a box truck for last-mile deliveries.
a front view shot of a white sports car on the highway during daytime
Source: Shutterstock

There’s no doubt we’re experiencing a new auto revolution. The first wave was the big name stocks that are typically splayed across the headlines. The second wave in auto stocks is the ones that go through the initial wave without a great deal of fanfare.

They’re not going after the sexy high-end market. They’re the ones that are building vans and trucks that haul things on what’s commonly know as the “last mile” of deliveries. There are also some interesting companies that are moving beyond just the vehicles to more automation.

They by and large missed the big capital influx some of the carmakers received and that means as we head into rougher waters, they may have trouble staying afloat.

Also, there are a couple big automakers here that have been left in EV makers’ dust due to their slow pivot toward the future.

The last time we saw such a flourishing in the automobile markets was around a century ago when dozens of carmakers popped up as the internal combustion engine arrived on the scene and was paired with production line manufacturing.

The thing is, most of those companies now rest in the dust bin of history no matter their noble motives.

Here are seven auto stocks left to fend for it selves:

ARVL Arrival $2.045
GM General Motors $39.6
HMC Honda $26.52
LEV Lion Electric $6.11
PTRA Proterra $6.22
TSP TuSimple $10.55
CENN Cenntro Electric $1.64

Auto Stocks: Arrival (ARVL)

An electric vehicle charger is seen next to a row of blue electric buses.
Source: BigPixel Photo / Shutterstock.com

UK-based Arrival (NASDAQ:ARVL) is certainly thinking out of the box. And given the size of the home market, it has rethought every aspect of the company. From its manufacturing strategy, to its materials, to its product lines, it is unconventional.

Yet, UPS (UPS) has already contracted for 10,000 vehicles and deliveries of its vans should happen this year. The trouble is the younger generation that were supporting these cool ideas are now experiencing its first bear market. And all the cool stuff that was going up in good times is now selling off as “risk on” is back for investors.

Plus, ARVL’s mini-factories scare US analysts that want their factories as big as possible. But in smaller countries this doesn’t make as much sense as small factories strategically distributed. However, US analysts drive expectations and this unusual strategy is another strike against the company.

ARVL has two former GM executives in lead roles, but it’s unclear if that’s a help or a hindrance at this moment in time. ARVL stock is down 88% in the past 12 months, but it’s still carrying a $1.3 billion market capitalization. Yet there’s almost 30% short interest against the stock at this point. Don’t fight the tape.

This stock has an F rating in my Portfolio Grader.

General Motors (GM)

Image of General Motors (GM) logo on corporate building with clear sky in the background.
Source: Katherine Welles / Shutterstock.com

When I mentioned the flourishing of carmakers up to and slightly past the Great Depression, one of the winners in the consolidation that happened afterward was General Motors (NYSE:GM), a global post-war titan for decades.

And to this day it’s still a significant global player. For example, in Q1 of this year, it delivered more than 500,000 vehicles. That’s more than half of Tesla’s (TSLA) total deliveries for 2021. And Q1 was a slow quarter.

The point is, GM isn’t in danger of losing its position to a trendy EV maker any time soon. The thing about auto production isn’t just making cars and trucks, it’s supporting them for years into the future and having trained support staff to service them.

Certainly GM isn’t leading the pack in innovation at this point, but given its size, it doesn’t have to. It can wait and watch and then snap up some of these upstarts when they’ve been vetted a bit more. But that isn’t a good look now. And the stock is suffering because its lack of innovation is hamstringing it right now.

GM stock has lost 30% in the past 12 months, 33% year to date. Given current supply chain issues, rising rates, and a looming recession, this isn’t the time to jump in.

This stock has a D rating in my Portfolio Grader.

Auto Stocks: Honda (HMC)

honda logo on a sign outside a honda dealership
Source: Jonathan Weiss / Shutterstock.com

Honda (NYSE:HMC) can be looked at through the same lens as GM. Both are auto stocks that have massive reach with deep roots. And given that reputation they have built over decades, they’re not interested in embracing fads.

HMC, like GM has dabbled in EVs and hydrogen-powered cars for decades. But they aren’t keen on retooling and reinventing to compete with the newcomers. More likely, they will also sit back and watch as the markets choose winners and losers. And when the market begins to mature a bit, they will step in, buy a brand and incorporate it into their empires.

But that doesn’t really do HMC much good right now. The stock hasn’t dropped significantly — it’s lost 12% in the past 12 months — but there’s not much to push it higher at this point either. And its 5.32% dividend is cold comfort if the stock remains in the red.

This stock has a C rating in my Portfolio Grader.

Lion Electric (LEV)

A photo of an electric car with the charger plugged in.
Source: Nick Starichenko/InvestorPlace.com

Generally speaking, even the U.S. market analysts tend to be a bit parochial (maybe snobby?) about the U.S. market, especially regarding auto stocks. If a company isn’t selling vehicles in the US, it doesn’t really matter because this is the place where companies really make it.

That’s not necessarily the case these days, as China has a much bigger market and Europe does as well. But what is true, is that some CEOs don’t want to be Elon Musk and just want to grow a good company with a good product. Canada-based Lion Electric (NYSE:LEV) slots into the latter category.

Its main products are electric school and mass transit busses, as well as a last mile delivery truck. Now, LEV products are built for the US market as well and given its large border with the US, it certainly has opportunities in the US. But Canada could be a very lucrative market to establish itself.

However, there’s significant competition from US EV makers. It’s landing orders in Quebec province, where its headquartered, but these aren’t game-changing orders, and deliveries don’t start until next year.

As the old saying goes, there’s many a slip twixt the cup and the lip. LEV stock has lost 67% in the past 12 months, 38% year to date. And there’s still 20% short interest betting against the stock.

This stock has a D rating in my Portfolio Grader.

Auto Stocks: Proterra (PTRA)

A hand holds an electric vehicle battery charger up to a car.
Source: Shutterstock

Proterra (NASDAQ:PTRA) is one of the competitors that LEV has in the auto stocks space. But PTRA isn’t solely an EV maker. It sells its battery platform, drivetrains, and charging solutions for heavy duty vehicles as well.

The busses are the proving ground for its other components. And they have logged more than 25 million miles so far. This is the one thing about new tech-driven industries like EVs — with various companies are trying all sorts of different ways to rethink the current production and distribution status quo —  some will work, and some won’t.

Trying to pick a “winner” at this point is risky, especially now that the market is getting more skeptical about their ideas. PTRA has an interesting model, but it still needs to prove itself.

PTRA stock has lost 60% in the last 12 months, and 30% year to date.

This stock has a D rating in my Portfolio Grader.

TuSimple Holdings (TSP)

TSP stock: a hand holding a phone displaying the Tusimple logo in front of a computer displaying the company's investor relations page
Source: T. Schneider / Shutterstock

As I mentioned above, there are plenty of variations among auto stocks. A prime example is TuSimple Holdings (NASDAQ:TSP). It’s not an EV maker, but a systems builder for automated trucking.

Instead of competing in market for long-haul and short-haul trucks, TSP has put forth a model for an Autonomous Freight Network from say a railyard to a distribution warehouse to last mile delivery. It has built the infrastructure and waits for someone else to build the autonomous vehicles.

It certainly makes sense. And it also allows for heavy-duty autonomous vehicles to have a “smart” infrastructure once they’re up and running. It also means those trucks can be diesel, electric, natural gas, or hydrogen powered. TSP’s tech is agnostic.

The trouble is, so far it has built roads to nowhere since there aren’t any autonomous trucks to run the routes. But it still has backers, and a $2.3 billion market cap. But TSP stock has lost 71% year to date. It may be that it’s just a bit too ahead of its time. And this is no time to roll the dice.

This stock has a D rating in my Portfolio Grader.

Auto Stocks: Cenntro Electric Group (CENN)

Cenntro Electric Group (CENN) Unveils its iChassis Autonomous Driving Vehicle at CES 2022
Source: Cenntro Automotive

Commercial EV auto stocks are front and center on this list of embattled stocks. And Cenntro Electric Group (NASDAQ:CENN) is a prime example of how wild the ride has been for some of these companies trying to make it.

CENN makes for commercial EVs, from a utility task vehicle (like a side-by-side ATV) to a box truck. It has the potential to sell into 32 different countries and already has sales in the US, Europe, Israel, Korea, Singapore, and Japan. But those sales are in the four digits at this point.

Then, last December, CENN was sold in kind of a reverse merger to Naked Brand Group, a lingerie retailer that was a meme stock for most of 2021. This has left investors on both sides of this merger scratching their heads. And it certainly hasn’t helped the stock.

CENN stock lost 82% in the past 12 months, 69% year to date. It’s current market cap is a mere $373 million, which gives it little wiggle room moving forward.

This stock has a D rating in my Portfolio Grader.

On the date of publication, Louis Navellier has no positions in the stocks in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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