With Tesla’s Woes, Are There Great Alternatives?

While there might still be fervent fans of Elon Musk’s Tesla Inc. (NASDAQ: TSLA), it’s hard to say the car manufacturer has had a good year, with share prices decreasing by nearly over 30% over the last 3 months.

This is obviously concerning for investors, and there are no signs of a quick turnaround. 

We’ve already talked about the fact that the second Trump administration is willing to endure short-term pain to achieve its goals. 

However, is the spiral indicative of issues in related industries? Essentially, for those looking for investments related to either vehicle manufacturing or green energy, are there better options than Tesla?

Given that Tesla currently has a Zen Rating of C and other stocks are looking much better, and given Tesla’s increasing instability, we think so. 

First, the bad news. At present, the best opportunities might not be car manufacturers …Not a single one we cover has a Zen Rating higher than C. However, that doesn’t mean there aren’t hopeful options in related industries, including:

Dorman Products Inc (NASDAQ: DORM) doesn’t make cars, but they do create replacement parts and fasteners for many types of vehicles. With a Zen Rating of A, they are a great option, considering that car parts will be necessary as long as people are on the road, even if the new car market is struggling right now. 

Additionally, they have component grades of B for growth and artificial intelligence (our own algorithm anticipates potentially strong trends to come) and an A in financials. These grades indicate it’s a solid company with room for growth in a chaotic market.

Motorcar Parts of America (NASDAQ: MPAA) is another A-rated stock that focuses on parts. While their specialty is a bit more on the industrial side of things and often goes beyond the average vehicle, they still represent an excellent opportunity for some portfolios, showcasing excellent growth potential (see their A component grade for Growth below). 

In both cases, you’ll want to consider the following trends:

• Cars and fleets in the United States are, on average, getting older. Costs for replacement are high, and as such more people and organizations are hoping to make repairs than replace their vehicles altogether.
• Tariffs could raise prices for new vehicles soon, leading to increased motivation to keep older vehicles longer, and repair vehicles instead of replacing them. This is in combination with rising car prices across many brands to begin with.

Both of the above are underlooked options that might be worth consideration, though, of course, there are many other stocks we review. You know your portfolio and needs best, so take a look for yourself on WallStreetZen!

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