We recently published a list of 13 Most Promising EV Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where General Motors Company (NYSE:GM) stands against the other most promising EV stocks to buy according to hedge funds along with the industry outlook.
According to a September 13 report by S&P Global, the auto industry's shift to electric vehicles (EVs) is accelerating, with 2026 seen as a pivotal year for adoption. By 2030, over 25% of new passenger cars sold are expected to be electric, as the transition away from internal combustion engines (ICE) gains momentum.
Major automakers are projected to produce over 70% of global EVs by 2030, up from just 10% in 2022. However, a few challenges remain, like range anxiety, especially for those without convenient charging options. Addressing these issues will require collaboration among automotive, utilities, government, and property owners, which could create a way for significant growth in vehicle electrification and potentially end the ICE era.
We discussed the market dynamics of the EV industry in our article, 11 Small Cap EV Stocks to Invest In. Here is an excerpt from the article:
While Europe saw significant adoption of EVs in the earlier years, it has seen a slowdown. According to an October 3 report by McKinsey, the growth of EVs in Europe poses both opportunities and challenges for the automotive industry, which currently contributes $1.9 trillion to the economy.
While electric mobility could add up to $300 billion in gross value added (GVA) by 2035, the industry could risk losing $400 billion if European OEMs' global market share declines from 60% to 45%.
Key strategies for success include expanding the domestic battery supply chain, improving manufacturing capabilities, streamlining regulations, and investing in R&D and talent development. By proactively addressing these challenges, European OEMs can capitalize on the EV shift, generate new value, and secure the region's economic future in the automotive sector.
In a CNBC interview, Young Liu, Chairman of Hon Hai Technology Group said that the future of the automotive industry will be dominated by electric vehicles, with hybrids playing a limited role due to advancements in battery technology. He made a note of current challenges such as charging times and range anxiety, but expects improvements in battery systems will eliminate the need for hybrids.
Liu outlined a path to profitability for EV companies based on three key strategies: "platformization, modularization, and standardization". He believes these will help streamline operations and reduce the need for individual investments in proprietary platforms, which is a challenge for traditional manufacturers due to their existing structures.
Our Methodology
For this article, we used stock screeners and ETFs to identify over 40 companies with significant operations related to the EV industry. Next, we narrowed our list to 13 stocks most widely held by institutional investors. The most promising EV stocks are listed in ascending order of their hedge fund sentiment which was taken from Insider Monkey's Q2 database of 912 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 Fund Holders: 72
General Motors Company (NYSE:GM) is a leading global automotive manufacturer known for brands such as Chevrolet, Buick, GMC, and Cadillac. The company offers a diverse range of vehicles, from affordable options to luxury models, and announced and promoted its transition towards an all-electric future with its Ultium Platform.
However, the company announced on October 8 that it will abandon the "Ultium" branding for its electric vehicle batteries and associated technologies as part of a strategic reevaluation of its EV and battery operations. This decision was revealed ahead of an investor event. While the company's EV and EV battery operations will continue, the name Ultium is going.
Although General Motors (NYSE:GM) has revised its EV sales targets, it reported notable growth as it sold nearly 21,000 EVs in July and August, nearly matching total sales from the second quarter. GM aims for profitability in EV production at an output of 200,000 units and is committed to becoming fully electric by 2035.
In the third quarter, it experienced a 3% increase in U.S. retail sales, totaling 659,601 vehicles, despite a 2% decline in overall deliveries. EV sales reached a record high of 32,095 units, a 60% increase year-over-year. General Motors (NYSE:GM) plans to launch five ICE models and two new EVs in the fourth quarter.
The company recently showed its optimistic 2025 outlook to financial analysts at its Spring Hill, Tennessee site. The company reported strong sales for both gas-powered vehicles and EVs, becoming the second-largest EV seller in North America with plans to produce around 200,000 GM-branded EVs this year.
Its diverse EV lineup, including models like the Chevrolet Equinox EV and Cadillac LYRIQ, addresses range anxiety with most models offering over 300 miles per charge. As the company nears EV profitability, it benefits from declining battery costs and reduced fixed expenses. For the future, GM will continue to launch new gas and diesel SUVs while maintaining capital spending levels for 2025.
Overall GM ranks 2nd on our list of most promising EV stocks to buy according to hedge funds. 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.
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Disclosure: None. This article is originally published at Insider Monkey.