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3 Car Stocks That Could Be Bigger Than Tesla By StockNews

© Reuters. 3 Car Stocks That Could Be Bigger Than Tesla

The recent electric vehicle (EV) industry slowdown has rendered renowned EV manufacturer Tesla’s (TSLA) prospects uncertain. However, as the global automobile industry continues to recover in tandem with the economic recovery, established companies Toyota Motor (NYSE:), Honda Motor (HMC) and Volvo (VLVLY (OTC:)) appear poised to overtake TSLA soon. Read on.The world’s largest electric vehicle (EV) manufacturer Tesla, Inc. (NASDAQ:) dominated the global automobile industry last year as the demand for EVs skyrocketed. Moreover, with most governments announcing their plans to phase out fossil-fuel-powered vehicles, the EV giant gained significant traction.

While TSLA is still the biggest EV company, its stock looks highly overvalued at its current price level given the company’s relatively low profit margin. Furthermore, because the current semiconductor shortage is affecting the EV industry significantly, increasing production costs and low sales might cause TSLA’s shares to retreat in the coming months.

Regardless, overall automobile sales projected to rise in the recovering global economy despite temporary headwinds in the EV industry. Given this backdrop, we believe established car manufacturers Toyota Motor Corporation (TM), Honda Motor Co., Ltd. (HMC) and Volvo ADR (VLVLY) will grow substantially in the near term, potentially overtaking TSLA.

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