The automotive industry is at a pivotal moment, backed by innovation and evolution, which should help revolutionize this segment. Electrification is still the driving force in this niche thanks to the growing interest in these vehicles and the manufacturers’ aim to meet the demands. Despite the appeal, there are challenges. 

President Trump’s proposed tariffs could create obstacles, specifically skyrocketing vehicle prices. This could add pressure on manufacturers and consumers, which can lead to market uncertainty.

Despite these potential challenges, the automotive sector continues to show resilience and grow. With a market cap of $1.81 trillion, it’s one of the more dynamic industries, especially for investors. With continued expansion backed by advancements in technology, policy support, and infrastructure development, this could be a solid opportunity for investors looking to grow their portfolios.

General Motors Company

General Motors (GM), a company behind the iconic Chevrolet, GMC, and Cadillac, among others, and while electrification is taking over the market, GM aimed to remain competitive, backed by a $35 million investment in electrification and autonomous vehicle development. With promising models like Cadillac LYRIQ and Chevy Silverado EV, the company aims to produce 1 million EVs per year in North America by 2025. In addition, GM’s focus on profitability is evident from its $3.5 billion expense reduction plan.

GM’s Q4 and full-year report for 2024 show solid numbers, with Q4 revenue reaching $47.7 billion - over the company’s estimates and up by 11% yearly. For the full 2024 report, GM reported $187.44 billion, an increase of 9.1% from 2023’s report. With financial growth aside, the company continues to invest in its Ultium platform, which is the foundation of its Blazer EV and Sierra EV. In addition to that, it’s also advancing its hydrogen fuel cell technology in commercial applications.

GM demonstrated strong stock performance throughout most of 2024, with prices starting at $35.99 at the beginning of the year and peaking at $57.04 in October before sliding back down to $53.27 per share at the start of 2025. GM’s trailing P/E of 7.31 and forward P/E of 4.09 shows undervaluation and potential for growth in the future. The EPS for the trailing 12 months is $6.14, showing solid profitability.

Stellantis N.V.

Next is Stellantis (STLA), a company known for legacy brands such as Peugeot, Citroen, and Jeep among others. The company’s Dare Forward 2030 strategy will see the automaker investing €50 billion (USD 52 billion) in electrification over the next decade to achieve a sales mix of 50% electric and non-electric passenger vehicles in both Europe and the United States. Stellantis’ focus on reaching margins in the double-digit range and leveraging the Fiat Chrysler-PSA merger shows its commitment to profitability and growth.

Stellantis’ Q3 report for 2024 shows a challenging period, with net revenues dropping by 27% year over year to $36 billion. The shipments saw a drop of 20% as a result of reduced volumes in regions like Europe and North America. The company also reduced shipments to the US by 200,000 vehicles in the second half of 2024, which is part of its strategy to reduce inventory and mitigate the impacts of potential Trump tariffs. Despite that, the company is investing over $2 million in production facilities in Italy and plans to launch new hybrids that would meet the US’s CO2 targets. 

The stock stabilized at the beginning of 2025, offering another undervalued opportunity for investors. This claim is backed by the trailing P/E ratio of 3.8,5, and the potential growth is evident from the forward P/E ratio of 4.48. The EPS in the following 12 months is $3.39, which is another key metric that shows strong profitability. 

Toyota Motor Corp

One of the biggest names in the automotive industry is Toyota (TM). The company has been leading the charge with over 10 million sold vehicles in 2024. When it comes to hydrogen power, Toyota has been leading the pack with its Mirai model. Recently, Toyota began to dip its toes into the EV segment with the bZ series and plans to produce 600,000 units by this year.

Toyota’s Q3 FY2025 shows mixed results but still performs admirably. Total vehicle sales decreased 4% year over year, meaning that the company sold 7 million units in the first nine months. Sales revenue was down as the company reported $299.77 billion, a decrease of 4.9%. On the other hand, the net income of $26.41 billion is an increase of 3.9% year over year.

TM prices ranged between $159.04 and $255.23 peaking in Q1 2024 before hitting a bottom in Q2. Looking at the trailing P/E ratio of 7.69 and forward P/E ratio of 9.74 shows that the company’s stocks are a favorable buy at the moment and will continue to grow. This is backed by Toyota’s strategic vision to dive into mobility solutions. For example, Toyota Mobility COncept emphasizes electrification, something that can help it be competitive in this profitable segment as well.

ZEEKR Intelligent Technology Holding Limited

Chinese automotive manufacturers have been doing very well in recent years, and one of the most popular names is Zeekr (ZK). This subsidiary of Geely Holding Group (GELYF) is positioned as a premium EV manufacturer, offering state-of-the-art technology at very attractive prices. With 222,123 vehicles delivered in 2024, Zeekr outpaced Chinese rivals, such as XPeng and Nio.

The Q3 report for 2024 shows that Zeekr has made some significant improvements in the past year. The company reported vehicle sales of $2.05 billion, which is a 42% increase compared to Q3 2023 and up 7.2% from Q2 2024. Total revenue of $2.16 billion represented an increase of 30.7% compared to last year’s Q3. In addition to that, the gross profit saw an increase of 28.5%, totaling $0.41 billion.

We saw Zeekr’s stocks on the market in May last year, starting at $28.26. This was followed by a drop over the next couple of months, reaching its lowest point of $13.52. For the second part of the year, the stock prices began to grow, reaching a peak of $32.30, and held stable at around $25.00 per share in January 2025. A presence in Mexico is helping the company move closer to the US market, however, Trump’s trade war threatens this road forward.

XPeng Inc.

This Chinese automotive manufacturer has positioned itself as a strong contender in the EV market. XPeng (XPEV) managed to achieve several milestones in 2024, setting record deliveries, and the success of the MONA M03 model. With multiple models already available and plenty in the pipeline, XPENG could see some significant growth in 2025 and beyond.

XPeng’s Q3 report for 2024 shows 46,533 deliveries in these three months, an increase of 16.3% compared to Q3 last year. This means that the total revenues of $1.44 billion are also up by 18.4% from the same period last year and 24.5% from Q2. The revenue from vehicle sales only totaled $1.25 billion, showing an increase of 12.1% compared to Q3 2023 and a 29% increase over the previous quarter of this year.

XPeng had a mixed 2024, starting the year at $13.09 before dropping to the yearly low of $6.55. In Q3, the stock began on an upward trend, closing the year at $11.82, a pace that continued until the start of 2025. Analysis shows that the forward P/E ratio of 35.6 provides some optimism about the future potential for profits. While the company’s trailing 12 months EPS was -$1.24, the focus on innovation in the EV segment and autonomous driving makes it a good option for growth. 

Conclusion

The automotive industry is going through a transformation, backed by advancements in technology, which not only advances the EV sector but could offer increased long-term advantages for manufacturers. Legacy automakers are shifting gears, investing in electrification of their vehicle line-ups, and looking to outcompete foreign and domestic peers. Investors will be in the driver seat going forward, carefully considering how future development of the electric vehicle sector will help drive the future of the automotive industry.