We recently compiled a list of the 13 Best Car Stocks To Buy In 2025. In this article, we are going to take a look at where Polaris Inc. (NYSE:PII) stands against the other car stocks.
Car stocks are the stock holdings of businesses engaged in the automotive market, such as those that produce automobiles, auto parts, or industry-related services.
According to Reuters, U.S. new car sales in 2024 grew significantly from their pandemic lows due to increased production, restocked inventory, and growing demand for hybrid cars. As per Wards Intelligence, new car sales in the United States hit 15.9 million in 2024, up 2.2% from 2023 and the highest since 2019.
In 2025, S&P Global forecasts that global sales of new light vehicles, or passenger cars and trucks, are projected to rise 1.7% to 89.6 million units. The overall reduction of 2025 automotive estimates reflects anticipated changes in US policy following the election. There will be significant impacts on the demand for vehicles as a result, particularly on interest rates, trade flows, sourcing, and the rates of BEV adoption.
Colin Couchman, executive director of global light vehicle forecasting for S&P Global Mobility, commented:
“2025 is shaping up to be ultra-challenging for the auto industry, as key regional demand factors limit demand potential and the new US administration adds fresh uncertainty from day one,” “A key concern is how ‘natural’ EV demand fares as governments rethink policy support, especially incentives and subsidies, industrial policy, tariffs, and fast evolving OEM target setting.”
Chris Hopson, principal analyst at S&P Global Mobility, recently stated that consumers who are considering buying a new car are hurrying to dealers before possible price implications become apparent. The sales spikes in March and April might open the way for future volatility. In the next three months, automakers will face new, tariffed inventory and production levels in addition to unstable economic conditions.
In response to industry criticism, President Trump recently introduced a two-year relief provision linked to domestic sales and manufacturing volume, which loosened the recently imposed 25% tariffs on cars and parts. Now, automakers with U.S. factories can deduct import taxes on parts, starting at 3.75% of the suggested retail price of a car in the first year, and then 2.5% in the second year. Vehicles with 85% U.S., Canadian, or Mexican parts are exempt from tariffs, which will rise to 90% by next year. Furthermore, the administration exempted these companies from overlapping taxes on Canadian and Mexican commodities, steel, and aluminum. After industry groups warned that the duties, which went into effect in March for automobiles and on May 3 for parts, would increase auto prices, lower sales, and negatively impact service costs, the move was made.
GM chief executive Mary Barra stated:
“We’re grateful to President Trump for his support of the US automotive industry and the millions of Americans who depend on us,”
Nonetheless, there will be plenty of fireworks as leading businesses compete for market share because the automotive industry is still evolving. According to Dentons, the automotive industry will need to be adaptable, creative, and flexible in 2025 as it manages changing consumer demands, regulatory changes, and economic challenges. In a market that is competitive and evolving quickly, Original Equipment Manufacturers can position themselves for success by taking advantage of developments in manufacturing technologies, software-defined vehicles, and electric vehicles.
A motorcyclist enjoying the open road on a sunny day.
Methodology:
For this article, we sifted through the online rankings to form an initial list of the 20 Car Stocks. From the resultant dataset, we chose 13 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s YoY revenue growth as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Polaris Inc. (NYSE:PII)
Number of Hedge Fund Holders: 26
Polaris Inc. (NYSE:PII) designs and produces off-road vehicles, such as motorcycles, snowmobiles, and all-terrain and side-by-side vehicles, for both recreational and practical uses. After purchasing Boat Holdings in 2018, the company expanded into the marine industry, providing exposure to yet another outdoor lifestyle market niche. More than 2,500 dealers in North America, 1,500 dealers internationally, over 25 subsidiaries, and 90 distributors in over 100 non-North American countries sell its products. It is one of the Best Auto Stocks.
The company has a history of successful operations, and the current management has proven operating discipline by focusing on the company’s power sports roots, selling off underperforming businesses that the previous management had acquired, and continuing the tradition of returning funds to shareholders through dividends and buybacks. Business cycle returns are strong, with returns on tangible capital typically in the mid- to high teens. Polaris Inc. (NYSE:PII) is still well-funded even though cash generation has decreased, which is to be expected given the challenging retail environment.
Polaris Inc. (NYSE:PII) commitment to product excellence across all market segments is further shown by the redesign of the helms in Bennington pontoons and the introduction of the new Series M in 2024, which proves how innovation in the maritime industry continues to appeal to consumers.
Overall, PII ranks 12th on our list of the Best Car Stocks To Buy In 2025. While we acknowledge the potential of PII 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PII but that trades at less than 5 times its earnings, check out our report about this 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.
