In this article, we will be looking at the 10 Best Car Stocks to Buy in 2026.
On March 31, Republican Senator Bernie Moreno said he plans to introduce new legislation to strengthen the US ban on Chinese automakers entering the American market. He also encouraged other countries to adopt similar restrictions.
The Biden administration had already put in place a sweeping regulation in January 2025 that effectively banned Chinese carmakers from selling passenger vehicles in the US. The government had pointed to national security concerns, including worries that vehicles could collect sensitive data on American users.
The ban has strong support from US automakers and other auto groups. According to the report by Reuters, major auto trade groups urged the US government to continue keeping Chinese car companies out of the US market. This comes ahead of a planned summit between President Donald Trump and Chinese President Xi Jinping in May 2026.
With this background in mind, let’s take a look at the 10 best car stocks to buy in 2026.
Our Methodology
To compile our list of the 10 best car stocks to buy in 2026, we used the Finviz stock screener to look for car manufacturing companies. We sorted our results based on market capitalization and picked the top 25 stocks. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2025 database of 1041 elite hedge funds. Finally, the 10 best car stocks to buy in 2026 were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2025.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10 Best Car Stocks to Buy in 2026
10. Toyota Motor Corporation (NYSE:TM)
Toyota Motor Corporation (NYSE:TM) is one of the best car stocks to buy in 2026. On March 24, Toyota Motor Corporation (NYSE:TM) announced that it is investing $1 billion in its plants in Kentucky and Indiana. The goal of this investment is to better meet the different needs of customers in the US.
According to the report by Toyota Motor Corporation (NYSE:TM), this investment is part of the company’s “best-company-in-town” approach, which allows it to invest and produce locally, support the local community, and offer a wide range of options suited to local demand through a multi-pathway strategy. The company continues to focus on investing and growing its presence in the country.
Out of the total $1 billion investment, Toyota Motor Corporation (NYSE:TM) said $800 million will go to the Kentucky plant to help prepare the facility for the production of battery electric vehicles and also increase production capacity for the Camry and RAV4 models.
The remaining $200 million will be invested in the Indiana plant to increase production capacity for the Grand Highlander.
Toyota Motor Corporation (NYSE:TM) is a Japanese multinational automotive manufacturer that offers a wide range of vehicles around the globe.
9. Lucid Group, Inc. (NASDAQ:LCID)
Lucid Group, Inc. (NASDAQ:LCID) is one of the best car stocks to buy in 2026. On March 16, Stifel reiterated its Hold rating on Lucid Group, Inc. (NASDAQ:LCID) with a price target of $17 after the company’s Investor Day presentation, where the company shared updates about its Midsize platform and autonomous driving capabilities.
Lucid Group, Inc. (NASDAQ:LCID) expects the EV market to grow about 3.5 times by 2035 compared to 2025 levels, which reflects a compound annual growth rate of 15%. The company’s Midsize platform is also expected to increase its addressable market from about $40 billion today to about $350 billion by 2030. Additionally, Lucid Group, Inc. (NASDAQ:LCID) shared a roadmap targeting Level 4 autonomous driving capabilities by 2029.
The company’s management confirmed its production target for 2026, expecting to produce between 25,000 and 27,000 units. Lucid Group, Inc. (NASDAQ:LCID) also aims to achieve positive gross margins in the mid-term and free cash flow generation by the end of the decade.
Stifel pointed out that rising oil prices could boost demand for electric vehicles in the United States.
Lucid Group, Inc. (NASDAQ:LCID) is an American automotive and technology company that manufactures luxury electric vehicles using its proprietary technology and software-defined vehicle architectures.
8. XPeng Inc. (NYSE:XPEV)
XPeng Inc. (NYSE:XPEV) is one of the best car stocks to buy in 2026. On March 23, Macquarie downgraded its rating on XPeng Inc. (NYSE:XPEV) from Outperform to Neutral and reduced its price target from $24 to $19 on the stock.
Macquarie pointed to uncertainty around XPeng Inc.’s (NYSE:XPEV) volume growth for this year. Analyst Eugene Hsiao said that the stock usually performs well when the company launches a clear hit product like the P7+ or Mona M03. However, the research firm believes that it is still too early to know if the upcoming GX or new Mona SUV series will have the same effect. Macquarie also cut its fiscal 2026 unit volume estimate by 7% for XPeng Inc. (NYSE:XPEV), citing weak early demand.
Earlier, on March 20, US Tiger Securities also downgraded its rating on XPeng Inc. (NYSE:XPEV) from Buy to Hold and set a price target of $20 on the stock.
The research firm pointed to the company’s strong results in Q4 2025. XPeng Inc. (NYSE:XPEV) reported total revenue of RMB22.25 billion, up 38% year-over-year. The company also reported that gross margin improved to 21.3%, an increase of 6.9 percentage points year-over-year.
XPeng Inc. (NYSE:XPEV) is a leading Chinese company that designs, develops, manufactures, and markets smart electric vehicles (EVs) for technology-savvy middle-class consumers.
7. NIO Inc. (NYSE:NIO)
NIO Inc. (NYSE:NIO) is one of the best car stocks to buy in 2026. On March 11, Nomura upgraded its rating on NIO Inc. (NYSE:NIO) from Neutral to Buy with a price target of $6.6, which is lower than its earlier target of $8.4 for the stock.
This update comes as Nomura sees improving financial performance and steady growth in vehicle deliveries, which suggests a stronger business cycle for NIO Inc. (NYSE:NIO). The research firm noted that the company’s operations have improved over the past two quarters, supported by an increase in deliveries and better cost control, helping its profitability.
While Nomura expects NIO Inc. (NYSE:NIO) to enter a healthier growth phase, it has cut its shipment forecasts for 2026 and 2027 due to a more challenging market environment. The research firm still expects vehicle deliveries to grow at a compound annual rate of about 25% between 2025 and 2028. Revenue is also expected to increase by around 21% during the same period.
Nomura raised its gross margin estimates for 2026 and 2027 and improved its operating margin forecasts by more than 3 percentage points for both years. The firm now expects NIO Inc. (NYSE:NIO) to reach non-GAAP operating profit breakeven in 2026.
The research firm also believes upcoming product launches could be a catalyst as NIO Inc. (NYSE:NIO) plans to launch three new mid- to large-size SUVs, including two models expected in the second quarter of 2026. Nomura said this could support order growth and profit margins if the company can continue to manage costs effectively.
NIO Inc. (NYSE:NIO) is a leading company in the global electric vehicle market. It designs, develops, manufactures, and sells smart electric vehicles. The company offers premium smart EVs under the NIO brand, family-oriented smart EVs through the ONVO brand, and small smart high-end electric cars with the FIREFLY brand.
6. Stellantis N.V. (NYSE:STLA)
Stellantis N.V. (NYSE:STLA) is one of the best car stocks to buy in 2026. On March 30, Morgan Stanley analyst Javier Martinez de Olcoz Cerdan reduced the firm’s price target on Stellantis N.V. (NYSE:STLA) from EUR 7 to EUR 6.50 while maintaining an Equal Weight rating on the stock.
Earlier, on March 19, Citi analyst Harald Hendrikse also lowered the firm’s price target on Stellantis N.V. (NYSE:STLA) from EUR 8 to EUR 7 and maintained a Neutral rating on the stock. The research firm also added the stock to an “upside 90-day catalyst watch.”
Citi is staying cautious on Stellantis N.V. (NYSE:STLA) due to concerns about profitability in the US and Europe. However, the analyst told investors in a research note that the stock can experience a change in investor sentiment after the stock declined by 39% in 2026.
In other news, on March 19, Stellantis N.V. (NYSE:STLA) announced that owners of its Dodge, Jeep, Ram, FIAT, and Maserati battery-electric vehicles will now be able to use more than 27,500 Tesla Supercharger locations in North America.
Stellantis N.V. (NYSE:STLA) is a leading global automaker with a portfolio of 14 iconic brands. Some of these brands are Alfa Romeo, Chrysler, Peugeot, Citroën, FIAT, Dodge, Jeep, Maserati, Ram, and Vauxhall. The company has operations in over 30 countries and serves customers in more than 130 markets around the world.
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