We recently compiled a list of the 8 Best EV Stocks To Buy Right Now.In this article, we are going to take a look at where General Motors Company (NYSE:GM) stands against the other EV stocks.
After a swift rise in the EV industry over the years, we saw a slowdown in its progress, especially in Europe and the USA. Nevertheless, it is just a matter of time before the technology takes over the traditional internal combustion engines (ICE).
While the growth has been slowing in the western part of the world, China has been working tirelessly to become the global leader in the EV industry. In a podcast episode of Everything Electric Show on October 20, Ford CEO Jim Farley discussed the ongoing transformation in the automotive industry.
He noted that while EV adoption continues to grow worldwide, significant changes have occurred regarding market dynamics. He emphasized China’s dominance in EV production, with 70% of global EVs manufactured there. A rapidly expanding sub-segment in China is electric vehicles with extended range (e-rev), which use a small combustion engine to power the batteries for longer trips.
This shift is reshaping global supply chains, brand preferences, and jobs, with geopolitical factors further influencing the industry’s future. Farley noted that these changes have become clearer over the past year.
We also discussed the country’s dominance in our article about small-cap EV stocks to invest in. Here is an excerpt from the article:
“While the growth in the US and Europe is slowing down, China is picking up a significant pace and dominating the EV landscape. According to a World Economic Forum report, Chinese EVs are much cheaper than their Western counterparts, with an average price of $34,400, compared to $55,242 in the U.S. The price gap is driven by lower labor costs, favorable government subsidies, and more affordable battery sourcing.
The United States government acknowledges the potential of EVs in the future of mobility and is trying its best to push for its development. On July 11, the Department of Energy (DOE) announced $1.7 billion in grants aimed at converting 11 auto plants in eight states to produce electric vehicles and components.
Reuters reported on October 22 that U.S. Energy Secretary Jennifer Granholm announced that the DOE is working quickly to finalize $1.7 billion in grants. The funds include $500 million for GM’s Michigan plant and $334.8 million for Stellantis’ Belvidere plant, with additional funds for the latter’s Indiana facility.
According to another Reuters report from September 23, Monroe Capital LLC announced plans to launch the Drive Forward Fund LP, aiming to raise up to $1 billion to provide loans to smaller auto suppliers transitioning from internal combustion engine vehicles to EVs.
The White House supports this initiative, emphasizing that it will offer affordable capital to help small and medium-sized auto manufacturers refinance, grow, and diversify and will benefit over 250,000 workers.
Moreover, new U.S. tariffs on Chinese EVs and stricter emissions regulations are pushing automakers to adapt their supply chains. Monroe CEO Ted Koenig highlighted the fund’s importance in cultivating growth and innovation among suppliers struggling to secure financing for EV production.
Our Methodology
For this article, we identified over 30 EV manufacturers using the Finviz stocks screener and narrowed our list to 8 stocks most widely held by institutional investors. The stocks are listed in ascending order of their hedge funds which was taken from Insider Monkey’s Q2 database of 912 elite hedge funds.
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).
A group of technicians in a garage, inspecting car parts and ensuring safety compliance.
Number of Hedge Funds Holders: 72
General Motors Company (NYSE:GM), known for brands like Chevrolet, Buick, GMC, and Cadillac, is focused on transitioning to an all-electric future through its vehicle lineup. However, on October 8, GM announced it would discontinue the “Ultium” branding for its electric vehicle batteries and technologies as part of a strategic review. Despite the branding change, GM will continue its EV and battery operations.
In July and August, GM sold nearly 21,000 EVs, approaching its second-quarter totals. The company is aiming for profitability in EV production at 200,000 units and remains committed to becoming fully electric by 2035. In the third quarter, U.S. retail sales rose by 3%, with 659,601 vehicles sold, while EV sales hit a record 32,095 units, marking a 60% year-over-year increase. GM plans to release five ICE models and two new EVs in the fourth quarter.
General Motors (NYSE:GM) released its Q3 earnings on October 22 which exceeded Wall Street’s third-quarter expectations, prompting the company to raise its 2024 guidance. The company reported adjusted earnings per share of $2.96, surpassing the expected $2.43, and revenue of $48.76 billion, higher than the anticipated $44.59 billion.
The company now projects full-year adjusted earnings before interest and taxes between $14 billion and $15 billion, up from previous estimates of $13 billion to $15 billion. It also raised its automotive free cash flow forecast to a range of $12.5 billion to $13.5 billion, up from $9.5 billion to $11.5 billion. Additionally, the automaker adjusted its net income forecast to between $10.4 billion and $11.1 billion, compared to earlier guidance of $10 billion to $11.4 billion.
According to the CEO, Mary T. Barra, General Motors (NYSE:GM) grew its U.S. retail market share with competitive pricing and well-managed inventories in Q3. In China, sales improved, and dealer inventory dropped significantly. The company remains on track to meet its 2024 EV production and profitability goals, benefiting from its dedicated EV platform, U.S. battery manufacturing, and flexible assembly capabilities, advantages that many competitors lack.
“Other top Q2 contributors included Extra Space Storage and General Motors Company (NYSE:GM). Shares of automobile manufacturer General Motors (GM) rose as its internal combustion engine business has also received a boost from the recent slowdown in electric vehicle adoption among consumers. GM also announced additional share repurchases in Q2, reinforcing its commitment to returning cash to shareholders.”
Overall GM ranks 2nd on our list of the best EV stocks to buy. While we acknowledge the potential of GM 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 timeframe. If you are looking for an AI stock that is more promising than GM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
