As the enthusiasm for electric vehicles, or EVs, heats up, Tesla Inc. (ticker: TSLA) has moved into the top spot as the most valuable automobile company in the world.

Driver motivators are rapidly changing as new generations emerge with different values than previous generations. New consumers are searching for automakers who are bringing ecologically friendly innovation to their lineups, while continuing to put forth exceptional design. Electric vehicles represent the epitome of new cutting-edge technologies, but the motor groups that continue to rise are also those who are able to source their components more efficiently in light of tight global conditions.

The 10 most valuable auto companies in the world in 2023 by market capitalization are:

Car company Total value (by market capitalization as of May 23)
Tesla Inc. (TSLA) $584.7 billion
Toyota Motor Corp. (TM) $191.8 billion
Porsche Automobil Holding SE (POAHY) $113.6 billion
BYD Co. Ltd. (BYDDY) $105 billion
Mercedes-Benz Group AG (MBG.DE) $82.6 billion
Bayerische Motoren Werke AG (BMW.DE) $73.6 billion
Volkswagen AG (VWAGY) $73.6 billion
Ferrari NV (RACE) $52 billion
Stellantis NV (STLA) $48.9 billion
Honda Motor Co. Ltd. (HMC) $48.3 billion

10. Honda Motor Co. Ltd. (HMC)

Founded in 1948, this Japanese company is headquartered in Minato, Tokyo. Honda continues to succeed with their Accord and Civic sedans, their CR-V small SUVs as well as their luxury brand, Acura. Additionally, they have held the title as the world's largest motorcycle manufacturer for almost 65 years and produce many other small engine and generator products. Despite a long legacy of quality, reliability and longevity, Honda's increasing warranty costs have been dragging down their stock price. Additionally, they have long battled with currency issues between the yen and the dollar. Overall Chinese automotive demand fell precipitously during Honda's fiscal fourth quarter in 2022 with Chinese retail automotive unit sales falling nearly 40% year over year.

9. Stellantis NV (STLA)

Stellantis is a fairly new name to many consumers, despite holding 14 popular brands. These brands include: Abarth, Alfa Romeo, Chrysler, Citroen, Dodge, DS Vehicles, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall. Based in Amsterdam, Stellantis resulted from a 2021 cross-border merger between Fiat Chrysler Automobiles (Italian and American) and the PSA Group (French). In sales, only Toyota, Volkswagen and Hyundai are ahead. Like many of its competitors, semiconductor supply issues have hampered their foray into electric vehicles and a charging network. However, they are continuing to grow by acquisition, including the car-sharing platform, Share Now, and an autonomous technology platform, aiMotive.

Stellantis has an overarching vision of "moving people and making connections" which their CEO, Carlos Tavares, have been able to implement vis-a-vis their superior profit margins over their competitors, while empowering each individual marque to demonstrate stand-alone success and differentiation.

8. Ferrari NV (RACE)

Enzo Ferrari began his luxury sport car company in Maranello, Italy in 1939. For almost 85 years, Ferraris have delighted and enthralled racing enthusiasts, most notably in Formula One racing where its team, Scuderia Ferrari, holds highest court. The same care and dedication to elite racing cars has also allowed Ferrari to build elegant and prestigious sports cars, many of which hold their value extraordinarily well for collectors. Not only has Ferrari built an enduring firm, but its brand recognition and desirability is among the strongest in the world. Ferrari is one of the few automakers that still holds to a low-volume, high profit-margin business plan, averaging around 8,400 cars sold each year. However, they had a banner year in 2022, delivering 13,221 cars, which also drove up net profit. Ferrari is finally moving into the SUV field with its 2024 Purosangue, 715 horsepower, 12-cylinder, 4-seater that is expected to cost just over $400,000.

Ferrari does currently offer four luxury hybrid models, but has been remarkably tight-lipped about its 2025 plans for a fully electric model.

7. Volkswagen AG (VWAGY)

While many customers are flocking to brands that are making major moves in EV technology, Volkswagen has seen its stock move downward since its Mar 2021 announcement that they were seeking to become the EV market leader. Depressed Chinese automotive sales have greatly impacted VW. Supply chain issues have also created liquidity issues for the company that owns iconic brands like Audi, Lamborghini, Bentley, Porsche and Ducati, in addition to Volkswagen, Volkswagen Commercial Vehicles, Škoda, Seat and Cupra. Founded in 1936 and headquartered in Wolfsburg, Germany, Volkswagen is best known for its iconic Beetle. Many still pine for the Volkswagen Type 2, known as the Microbus, which VW updated in 2022 as the electric and strangely named "ID. Buzz," which will debut in the U.S. in 2024.

6. Bayerische Motoren Werke AG (BMW.DE)

Bayerische Motoren Werke AG is a 107-year-old German automaker based in Munich. Included under the BMW umbrella are the BMW, Mini and the ultra luxurious Rolls-Royce marques. They also produce motorcycles and offer financial services. Like its other European counterparts, BMW suffers from the concurrent issues of supply chain shortages, economic factors and overall reduced demand for automobiles. BMW has spent the past couple of years digging into its historical archives with the 50th anniversary of the M brand in May 2022. The company brought forth 50 exterior color choices from the past as well as issued a rebrand of the famed propellers logo for in-the-know buyers. However, it's also eager to move into the future with multiple all-electric and hybrid models.

5. Mercedes-Benz Group AG (MBG.DE)

Mercedes Benz Group AG was formerly known as Daimler AG, but the Stuttgart-based German company rebranded in 2022 to pursue a higher valuation to support its expansion into electric vehicles. Mercedes was created in 1926 and has consistently built on its mission to build the world's most desirable cars. Mercedes is also highly regarded for its leadership in vehicle safety through its intelligent driving systems. Mercedes manufactures the Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach and Mercedes-EQ as well as vans.

The German luxury car brand has suffered for a number of years as its stock steadily declines, but finally saw the writing on the wall and has been rebuilding its position as the top European luxury brand. Toward this effort, Mercedes is reinventing itself through influencer marketing within sports, technology, film and music to become known to a new generation of buyers. They are also paying closer attention to the customer experience with ateliers opening in Dubai and Shanghai for their prestigious clientele.

4. BYD Co. Ltd. (BYDDY)

BYD is a Chinese automaker based in Shenzhen that is comprised of two units: BYD Auto and BYD Electronic. Its name is an acronym for "Build Your Dreams." Like Tesla, it is also a relative newcomer, founded in 1995 by Chinese billionaire, Wang Chuanfu. In just a decade, the company cornered the Chinese market on mobile battery technology and manufacturing, but has gone on to make significant investments in all manner of battery applications from automobiles, trucks, bicycles, busses, solar panels and even monorails.

In 2022, Chuanfu announced that the company was focused exclusively on the EV market. BYD has been able to achieve its rapid growth through vertical integration, much like Tesla has done – a key decision in an industry where new technology is growing very fast. BYD brings a deep knowledge of the most critical component of electric applications – the battery – and has been able to rely on its own steady supply of in-house components.

3. Porsche Automobil Holding SE (POAHY)

Porsche is a bright spot for its beleaguered parent, Volkswagen. Although a subsidiary, each company trades separately. This 92-year-old automaker, based in Stuttgart, Germany, has seemingly bounced back more vigorously than its other European counterparts from the pandemic, supply chain issues and depressed economic conditions throughout the European Union and globally. The company cut its teeth on its sports car lineup, especially the iconic 911, but had been fading fast in the 1990s when its operating costs became unwieldy. Its production had actually dissipated from 50,000 units the decade previously to barely 15,000 at its lowest point. While many feel that the Cayenne SUV was the model that turned the company around, it was actually another sports car model, the convertible, two-seater Boxster, that made young buyers swoon again.

The Boxster was an unconventional idea that brought Porsche back to the market and it is this kind of novel thinking that continues to help this automaker rise.

2. Toyota Motor Corp. (TM)

Toyota had long held the crown as the world's most valuable car company, but was toppled by Tesla in 2020. Created in 1937, this Japanese company is headquartered in the eponymous city of Toyota in the Aichi prefecture and includes Lexus, Subaru and Suzuki among its marques. Toyota brought the Prius to market worldwide around the turn of the century as one of the first hybrid vehicles and became the darling of U.S. environmentalists and eco-conscious consumers. However, these same environmentalists now decry hybrids as no longer being a viable alternative and Toyota has found itself at the bottom of automaker lists for its lack of decarbonization efforts.

Currently, zero-emission EVs represent less than 1% of Toyota's overall sales. Toyota believes that its strategy is justified, citing the high cost of EVs for most consumers and a lack of infrastructure to support them, although the company is beginning to make deeper commitments to all-electric vehicles in response to the criticism.

1. Tesla Inc. (TSLA)

Tesla made an early bet on electronic vehicles and continues to advance the concept through innovations in both battery life and charging range distance. Its choice of vertical integration has also enabled Tesla to be both nimble and far less vulnerable to the supply chain issues impacting most of its competitions. Additionally, Tesla's positioning for superchargers gives them first-position standing among consumers who are concerned about EV infrastructure, especially in the Midwest.

Price reductions of Tesla models has allowed the company to position itself more meaningfully in the minds of mainstream consumers. Tesla is the youngest automaker of the group, created in 2003, and is now headquartered in Austin, Texas. Not only has Tesla succeeded in becoming the most valuable automaker in the world, but also holds the status as one of the world's most valuable companies. Tesla's CEO Elon Musk has become the world's second-richest person as a result of his holdings in Tesla and other innovative, forward-thinking companies.

Copyright 2023 U.S. News & World Report

2023-05-26T18:37:56Z dg43tfdfdgfd