We recently compiled a list of the 7 Best EV Stocks Under $50. In this article, we are going to take a look at where General Motors Company (NYSE:GM) stands against the other EV stocks under $50.
EV Sales are Growing
Since 2018, electric vehicle (EV) sales have been rapidly growing as the world tries to reach its carbon neutrality goal by 2050. According to the International Energy Agency (IEA), only 2% of new vehicles registered globally were electric vehicles, and reached 18% by the end of 2023. Even though most of these sales were concentrated in China, Europe, and the US, other markets such as India, Thailand, Vietnam, and Latin America have also been adopting the EV trend at a fast pace.
In 2024, while the high costs due to interest rates stalled EV sales a little, they are still growing at a significant pace as the sales reached 3.4 million units in Q1, compared to 2.6 million in the first quarter of 2023, according to the IEA. Furthermore, the accounting and consulting firm, PwC analyzed 21 markets and found out that in the second quarter of 2024, 37% of vehicles sold in these markets were battery-electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), or hybrids, marking an increase from 30% in the same period of 2023. At the same time, overall EV sales rose by 21% compared to Q2 2023, while sales of internal combustion engine (ICE) vehicles declined by 9% during the same period.
BloombergNEF’s Long-Term Electric Vehicle Outlook shows that as technology improves and battery prices drop, EV adoption is increasingly driven by consumer demand. Passenger EV sales are expected to surpass 30 million units in 2027 and reach 73 million units by 2040.
Global EV Market to Reach $63 Trillion by 2050
Despite such progress, strong policy support is still needed, as only 69% of the global car fleet is expected to be electrified by 2050 in the base case scenario, short of the 100% target in the Net Zero scenario.
Heavy trucks and other segments lag in reaching net zero and full combustion vehicle sales need to stop by 2038 to reach the goal. The report states that the global EV market could reach $63 trillion by 2050, with significant investment needed in battery production and charging infrastructure.
According to estimates by Fortune Business Insights, the global EV market is expected to grow at a compound annual growth rate of 13.8% from 2024 to 2032, and Asia is currently the dominant region with a 51.24% market share. This is the time for investors to take positions in EV stocks, as the EV market is just getting started and is poised for a lot of growth.
Our Methodology
For this article, we used the FinViz stock screener to identify over 25 electric vehicle manufacturers with a stock price of under $50, as of August 7. We narrowed down our list to 7 stocks that were most widely held by institutional investors and listed the stocks in ascending order.
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.
General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 78
Share Price as of August 7: $40.65
General Motors Company (NYSE:GM) is a leading American automotive manufacturer that designs and sells trucks, crossovers, cars, and automobile parts. The company is famous for its diverse portfolio, which includes well-established brands such as Chevrolet, GMC, Cadillac, and Buick.
General Motors (NYSE:GM) runs through GM North America, GM International, Cruise, and GM Financial segments. It offers other services to customers, including financing options, vehicle maintenance, and advanced connectivity features.
General Motors (NYSE:GM) tops our list of the best EV stocks under $50. The stock was held by 78 hedge funds in the first quarter and the total stakes amounted to $4.8 billion.
General Motors (NYSE:GM) is making significant strides in the EV market. As the first major automaker to offer modern EVs, the company initially provided its vehicles only through lease agreements. Now, the company is shifting its focus to electric vehicles, with plans to phase out the production of gasoline and diesel models by 2035.
It plans to ramp up its EV production to 1 million units annually in North America by the end of 2025. The company is introducing electric models across its main brands, including Chevrolet, Buick, GMC, and Cadillac.
A major part of General Motors’ (NYSE:GM) push towards an all-electric future involves its Ultium battery platform, which represents a significant technological advancement. The company is also converting facilities, like its Orion Assembly plant, to support EV production.
Its joint venture, Ultium Cells Holdings, is expanding to produce battery cells at a larger scale, which is important for meeting the ambitious production target of 1 million EVs by 2025.
In the second quarter, the company saw a 21% increase in EV deliveries compared to the previous year. It signifies the growing consumer interest in electric vehicles and the company’s progress in this area.
Diamond Hill Large Cap Strategy stated the following regarding General Motors Company (NYSE:GM) in its first quarter 2024 investor letter:
“Other top contributors included Allstate, Caterpillar and General Motors Company (NYSE:GM). Automobile manufacturer General Motors continues capitalizing on the shift to electric vehicles (EVs) while maintaining the strength of its core gas-engine truck and SUV business. Though it has experienced some setbacks — such as needing to roll back its Cruise driverless car project — we believe the company remains well-positioned relative to secular tailwinds within the automobile business.”
Overall GM ranks 1st on our list of the best EV stocks to buy. You can visit 7 Best EV Stocks Under $50 to see the other EV stocks that are on hedge funds’ radar. 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.
Read Next: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
Disclosure: None. This article is originally published at Insider Monkey.
