Few stocks have generated investor wealth like Tesla. In the past decade, shares of the electric vehicle (EV) pioneer have soared 2,420%. That gain is hard to beat. However, at a price-to-earnings (P/E) ratio of 182, Tesla undoubtedly trades at a nosebleed valuation. That multiple implies flawless execution for the business to not only introduce full self-driving technology, but to be able to commercialize it to remarkable success.

That kind of outcome is far from certain. But for investors looking to put money to work in this industry, there's another supercharged auto stock, which is up 101% in the past three years, that's a better buy than Tesla.

Another solid quarter

Investors should take a closer look at Ferrari (RACE -3.28%). The Maranello, Italy-based enterprise continues to report strong financial results. For the three-month period ended Dec. 31, Ferrari increased revenue 11.8% year over year. Because shipments only grew by less than 1%, that double-digit top-line gain was bolstered by favorable pricing from a changing product mix. There's strong interest in personalization, which adds to the costs consumers pay.

The high-end automaker revealed a more impressive data point on the bottom line. Diluted earnings per share soared 22.6%. Investors were clearly impressed with the latest financial numbers. Shares jumped 8% following the announcement.

It's all about the brand

Because it sells vehicles, investors will group Ferrari with other automakers. However, this doesn't do the business justice. At its core, this is a luxury brand that resembles the storied fashion houses of Europe more so than a Detroit car manufacturer or even Tesla.

Ferrari is truly in a league of its own. And the credit goes to how management positions the brand. Founder Enzo Ferrari once said that the company "will always deliver one less car than the market demands." Unlike mass-market industry peers, Ferrari deliberately keeps its unit volume low in an effort to maintain the exclusive status of owning one of these supercars.

The result is incredible pricing power. Even though some of its special models cost more than $1 million, the business experiences strong demand. Often, buyers will put down huge deposits well ahead of time to lock in their orders.

That drives unbelievable profitability. Ferrari generated a wonderful 28.3% operating margin last year. How many car companies do you know that are this financially lucrative? Ferrari vehicles do more than simply transport someone from point A to point B. They are collector's items. Unsurprisingly, Ferrari caters to the ultrawealthy. But even if someone has deep pockets, they aren't automatically able to buy a new model. There's usually a waiting list.

Nonetheless, having a customer base that is less exposed to the ebbs and flows of the economy means that Ferrari's financial performance is virtually recession-proof. This is in stark contrast to the rest of the auto industry, which sees very cyclical demand trends.

Better value

Tesla's stock trades at a ridiculously expensive valuation. Ferrari, on the other hand, trades for a P/E ratio of 54. To be clear, this isn't cheap by any means, but there's no doubt it presents investors with a better value than the top EV stock.

For a while, Tesla was able to grow extremely fast because it faced limited competition. Its profitability was also commendable. But the situation has changed in the past couple years. There are formidable rivals on both the domestic and international fronts that call into question Tesla's pricing power. What's more, higher interest rates and inflationary pressures create macro headwinds to deal with.

Ferrari is in a much better position, always seemingly operating from a position of strength. Investors should buy this supercharged auto stock instead of Tesla.