We recently compiled a list of the 8 Fastest Growing Auto Stocks to Invest in Now. In this article, we are going to take a look at where Microvast Holdings, Inc. (NASDAQ:MVST) stands against the other auto stocks.
Auto Sector Outlook 2025
On December 20, 2024, S&P Global released its auto sales forecast for 2025. The report forecasts a slight decrease in global light vehicle production for 2025, estimating a 0.4% decline to 88.7 million units. Moreover, the production is also expected to fall slightly by 1.6%, with production levels finishing at 89.1 million units. The report predicts this decline to be across all regions except mainland China and South America. The primary factor influencing the 2025 outlook is the anticipated implementation of a widespread tariff regime by the incoming US administration, which includes a universal 10% tariff on all goods entering the US and a 30% tariff on goods from mainland China. You can read more about it in our article titled, 11 Best Undervalued Stocks to Invest in Now.
While elaborating on the expectations from a regional point of view, the report highlights stable production levels in Mainland China for 2025. The production level is anticipated to rise slightly by 0.1% to 29.6 million units. This will be driven by strong domestic demand for New Energy Vehicles and robust exports, though tempered by EU import tariffs on Chinese-made BEVs. On the other hand, in North America, the overall production is set to decrease by 2.4% to 15.1 million units. The report highlights that the US administration’s policies are expected to influence overall demand and challenge vehicle mix assumptions. Deregulation could provide tailwinds for the North American auto industry later in the administration’s second term.
Production in Europe is expected to reach 16.6 million units in 2025, a 2.6% decrease from the estimated 17.0 million in 2024. This reflects adjustments in the propulsion mix in preparation for the 2025 EU emissions rules, along with new tariffs associated with the Trump administration, which particularly impacts premium vehicles.
Despite concerns around electrification, the report expects electric vehicles to remain a significant growth sector. Global sales for battery electric passenger vehicles are projected to reach 15.1 million units in 2025, indicating a 30% increase compared to 2024 and accounting for an estimated 16.7% of global light vehicle sales. Moreover, in 2024 an estimated 11.6 million BEVs were sold globally, representing a 13.2% market share.
Our Methodology
To compile the list of 8 fastest growing auto stocks to invest in now, we used the year-over-year sales growth and 3-year sales growth as our primary indicators. Using the Finviz stock screener, we looked for auto manufacturers, auto parts, and auto and truck dealership companies that have a year-over-year sales growth of more than 15%, followed by a positive 3-year sales growth. We cross checked these figures from Seeking Alpha and ranked the eligible stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s Q4 2024 database.
Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A row of electric vehicles all powered by the company’s advanced battery systems.
Microvast Holdings, Inc. (NASDAQ:MVST)
Year-Over-Year Sales Growth: 39.03%
3-Year Sales Growth: 40.65%
Number of Hedge Fund Holders: 12
Microvast Holdings, Inc. (NASDAQ:MVST) is a company that focuses on creating advanced battery technologies. Its batteries are used for two main purposes including electric vehicles, and utility-scale energy systems. The company has a global presence and sells its products in Europe, the Middle East, Africa, Asia & Pacific, and the United States.
During the fiscal third quarter of 2024, Microvast Holdings, Inc. (NASDAQ:MVST) reported a record revenue of $101.4 million, representing a 27% year-over-year increase. The growth was largely driven by a 212% sales growth in the EMEA region. Moreover, the company also improved its gross margins to 33.2%, which was a substantial increase when compared to last year’s 22.3% margins. The company has made significant progress on new technologies, including silicon-based cell technologies and all-solid-state batteries.
On January 9, Microvast Holdings, Inc. (NASDAQ:MVST) announced a breakthrough in True All-Solid-State Battery technology. The company highlighted that, unlike traditional lithium-ion batteries, its ASSB technology completely eliminates liquid electrolytes, which are prone to overheating and can pose safety risks. Moreover, the ASSB technology can achieve voltages of 12V to 21V per cell, significantly higher than the typical 3.2V to 3.7V of lithium-ion batteries. This capability opens up new possibilities for applications requiring high energy density without compromising safety. It is one of the fastest-growing auto stocks to invest in now.
Overall MVST ranks 8th on our list of the fastest growing auto stocks to invest in now. While we acknowledge the potential of MVST as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MVST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.