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Tesla is Supercharging Legacy Automotive Stocks Amid EV Transition

by | Nov 5, 2021 | Stocks

We’ve spent a lot of time covering the latest developments in the electric vehicle market over the past few months.

As we saw in Monday’s piece, there’s good reason for it…

While EVs are still a niche industry in 2021, they are undoubtedly the future of the automobile.

Major automakers were resistant at first, but now they’re throwing obscene amounts of money into research and development…

And if the latest automotive stock rally is a gauge of the market’s appetite for EVs, then buckle up… Because the market’s about to go for a ride!

Back in 2019, Volkswagen AG (OTCMKTS: VWAGY) announced it would only produce EVs by 2026 — a big move in a short amount of time from 2020’s largest auto manufacturer.

Researchers at Deloitte expect EV sales to grow from 2.5 million in 2020 to 11.2 million in 2025, an annual growth rate of 29%.

That kind of growth has propelled Tesla Inc. (Nasdaq: TSLA) into one of the market’s biggest companies. And that enthusiasm is starting to spill over into the traditional auto industry…

Tesla, Ford and GT Set the Pace in November’s Automotive Stock Rally

In May, Ford Motor Co. (NYSE: F) unveiled its first battery-powered EV pickup truck with the new F-150 Lightning…

They may call it the Lightning, but it’s been blue skies for the stock since September for my pick for top EV pickup!

After a mixed market reaction to an earnings report that crushed expectations, the stock caught an industry tailwind off of positive news from Tesla’s deal with Hertz, sparking a rally across dozens of automotive stocks.

And then on Thursday, the newly cash-flush Ford announced it would retire $5 billion worth of debt it used to get through the worst of the pandemic. And shares took off like Carroll Shelby’s GT40 at Le Mans! All told, Ford’s stock is up over 50% since my May feature!

But it hasn’t just been the car markers benefitting from Tesla’s tailwinds, car parts companies are riding high as well…

There are names like Goodyear Tire & Rubber Co. (Nasdaq: GT) — October’s pick for my Sweet Spot Stocks strategy.

The company announced earnings of $0.72 per share on revenue of $4.93 billion, fueled by the first-quarter acquisition of competitor Cooper Tires. Shares have jumped over 25% since the report hit Oct. 1.

Even better, the GT Jan. 21, 2022, $18 strike call options popped from $1.85 to as high $6.62 during Friday’s trading!

Check out the video and see my thoughts on how GT’s earnings and the ongoing automotive stock rally!

WRITTEN BY<br>Lance Ippolito

Lance Ippolito

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