The Only 5 Auto Manufacturers Outperforming the Market in 2021 The ongoing chip supply shortage and higher input prices forced many auto manufacturers to cut production this year. However, growing demand, rising investor optimism, and policy support for the electric...

The ongoing chip supply shortage and higher input prices forced many auto manufacturers to cut production this year. However, growing demand, rising investor optimism, and policy support for the electric vehicle industry have enabled Tesla (TSLA), General Motors (GM), Ford (F), Lucid Group (LCID), and Tata Motors (TTM) to outperform the broader markets.

Despite rising consumer spending, the growing chip supply shortage affecting production, low inventory, and rising vehicle prices led to lower-than-expected November U.S. auto sales. However, rising investments to increase chip production, carbon-neutral goals, and the passage of the Bipartisan Infrastructure Bill that allots significant funding for the growing electric vehicle (EV) industry is expected to facilitate the auto industry's rapid recovery in the upcoming months.

While many auto stocks suffered, leading auto manufacturers still outperformed the broader markets and delivered record-high sales growth throughout this year, owing to their strong inventory, global brand recognition, and the substantial availability of auto components.

Tesla, Inc. (TSLA), General Motors Company (GM), Ford Motor Company (F), Lucid Group, Inc. (LCID), and Tata Motors Limited (TTM) are the only auto manufacturers that have outperformed the S&P 500 index so far this year.

Tesla, Inc. (TSLA)

EV giant TSLA designs, develops, manufactures, leases, and sells high-performance EVs, EV powertrain components and offers services related to its sustainable energy products internationally. The company operates in two segments ─ Automotive; and Energy Generation and Storage. It develops energy storage products, commercial facilities, and utility sites and owns its sales and service network.

On November 1, 2021, TSLA opened its 10 Supercharger locations to non-Tesla electric vehicles for the first time in the Netherlands. Non-Tesla drivers will need to create an account in the Tesla app, select "Charge Your Non-Tesla" search for the nearest Supercharger location, add a payment method and start charging. With this slow roll-out, TSLA expects to witness rising sales from the Supercharger network in the coming months.

For its fiscal third quarter, ended September 30, 2021, TSLA's total revenues came in at $13.76 billion, representing a 56.8% year-over-year rise. The company's gross profit came in at $3.66 billion, up 77.4% from the year-ago period. TSLA's income from operations came in at $2 billion, indicating a 147.7% rise from the prior-year period. While its non-GAAP net income increased 139.5% year-over-year to $2.09 billion, its non-GAAP EPS increased 144.7% to $1.86. The company had $16.07 billion in cash and cash equivalents as of September 30, 2021.

Analysts expect the stock's EPS to increase 170.5% year-over-year to $6.06 in the current year. The consensus revenue estimate of $51.15 billion for the current year represents a 62.2% rise from the prior-year period. In addition, it surpassed Street EPS estimates in three of the trailing four quarters. TSLA's EPS is expected to grow at a rate of 73.1% per annum over the next five years.

The stock has gained 37% year-to-date, beating the S&P 500's 22.8% returns. It closed yesterday's trading session at $966.41.

General Motors Company (GM)

GM designs, manufactures, and sells cars, trucks, crossover vehicles, and related automobile parts to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments worldwide. The company operates through GM North America; GM International; Cruise; and GM Financial segments. It also offers vehicle protection, maintenance, satellite radio, and automotive financing services.

On December 9, 2021, GM and MP Materials (MP) formed a strategic collaboration to develop a fully integrated U.S. supply chain for rare earth magnets with high resiliency and environmental sustainability. Under the long-term agreement, MP will supply U.S.-sourced and manufactured rare earth materials, alloy, and finished magnets that enable electric motors to transform electricity into motion in various EV models using GM's Ultium Platform. This initiative will help the companies receive wide recognition in the EV industry.

GM had $17.37 billion in cash and equivalents as of September 30, 2021. The consensus EPS estimate of $6.72 for the current year represents a 37.1% rise from the prior-year period. Analysts expect GM's revenue to improve 5% year-over-year to $128.60 billion for the current year. It surpassed the consensus EPS estimates in three of the trailing four quarters. Its EPS is expected to grow at a 15.2% rate per annum over the next five years.

The stock has gained 42% year-to-date. It ended yesterday's trading session at $59.13.

Ford Motor Company (F)

F designs, manufactures, markets, and services a range of trucks, cars, sport utility vehicles, electrified vehicles, Lincoln luxury vehicles, and related parts and accessories worldwide. The company operates through three segments ─ Automotive; Mobility; and Ford Credit. It provides retail installment sale contracts for new and used vehicles and direct financing leases for new vehicles to retail and commercial customers.

On December 8, 2021, F progressed in its goal to attain sustainability by making wiring harness clips in its Ford Bronco Sport models from ocean-harvested plastic. Possessing the same strength and durability of used petroleum-based parts, the nylon material provides a 10% savings in cost and requires less energy to produce. This makes F the first automaker to use 100% recycled ocean plastics to produce automotive parts and expects to gain widespread recognition across the industry.

F had $12.96 billion in cash and cash equivalents as of September 30, 2021. Analysts expect the stock's EPS to grow 363.4% year-over-year to $0.43 in the current year. The consensus revenue estimate of $126.83 billion for the current year represents a 9.4% rise from the prior-year period. In addition, it surpassed Street EPS estimates in each of the trailing four quarters. Analysts expect the stock's EPS to grow at a rate of 77.7% per annum over the next five years.

The stock has gained 132.4% year-to-date. It closed yesterday's trading session at $20.43.

Lucid Group, Inc. (LCID)

LCID is a technology and automotive company that develops electric vehicle (EV) technologies. The company designs, engineers, and builds electric vehicles, EV powertrains, and battery systems. As of June 30, 2021, it operated eight retail studios in the United States.

On November 5, 2021, LCID opened the Lucid Studio, its newest retail location at Tysons Corner Center in the Washington, D.C, Metro Area. This retail location should enable LCID to expand further the full Lucid Air lineup of luxury, high-performance EVs on the Eastern Seaboard.

LCID had $4.80 billion in cash and cash equivalents as of September 30, 2021. The consensus revenue estimate of $2.10 billion for the next year represents a 2340% rise from the prior-year period. The stock has gained 291.1% year-to-date. It ended yesterday's trading session at $39.15.

Tata Motors Limited (TTM)

Headquartered in Mumbai, India, TTM is a multinational automotive corporation engaged mainly in the business of automobile products, consisting of all types of commercial and passenger vehicles. It is also engaged in vehicle financing. It also provides information technology (IT) services, machine tools, and factory automation services.

TTM witnessed total sales in the domestic & international market of 62,192 vehicles in November 2021, representing a 25.3% rise from the prior-year period.

For its fiscal second quarter ended September 30, 2021, TTM's total revenue from operations increased 106% year-over-year to ₹61.38 KCr ($8.09 billion). The company had ₹30.33 KCr ($4 billion) in cash and cash equivalents as of September 30, 2021.

Analysts expect the stock's revenue to increase 3.5% year-over-year to $38.78 billion in the current year. It surpassed Street EPS estimates in three of the trailing four quarters.

The stock has gained 153.6% year-to-date. It closed yesterday's trading session at $31.95.

TSLA shares were trading at $958.51 per share on Tuesday afternoon, down $7.90 (-0.82%). Year-to-date, TSLA has gained 35.83%, versus a 25.15% rise in the benchmark S&P 500 index during the same period.

Tesla, Inc. (TSLA) and Ford Motor Company (F) are a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.

About the Author: Sweta Vijayan

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She's passionate about educating investors, so that they may find success in the stock market.

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