In this article, I evaluated two auto stocks, Nikola Corporation (NKLA) and Toyota Motor Corporation (TM), to determine which has the potential for substantial returns. After comparing the fundamentals of these stocks, we believe TM is a solid buy, while NKLA is best avoided for reasons explained throughout this piece.
New auto sales in the U.S. witnessed a significant rebound in 2023 after experiencing a decade-low in 2022. Several factors, including pent-up demand, improved inventories, and generous incentives, drove the surge in sales. According to data by Wards Intelligence, U.S. new vehicle sales last year finished at nearly 15.5 million units, of which EVs, including hybrids, made up around 17%.
