The auto industry is going through a level of disruption not seen in nearly 100 years. But that disruption is slow and will take time to fully shake out. What we know right now is that electric vehicle (EV) production and demand are growing and the market for gasoline-powered trucks and SUVs is booming.
One company that's primed to benefit from both the short-term and long-term trends is General Motors (NYSE:GM). And the company might be better positioned than you think.

Image source: GM.
The core is strong
Outside of a few brands -- like Tesla (NASDAQ:TSLA) -- the auto market is still very undersupplied in 2023. The Chevy and GMC brands of trucks and SUVs are still in extremely high demand, and the company has low inventory, despite increasing production to near or above pre-pandemic levels. These are high-margin vehicles that keep profits coming in for GM. And the profits are extremely high, as you can see below.
GM net income (TTM) data by YCharts. TTM = trailing 12 months.
GM has a $47 billion market cap, so the net income and cash flow numbers you see above make this easily a value stock. And while management thinks results will slow down slightly in 2023, they still expect net income of $8.7 billion to $10.1 billion. This is a great stock even without growth, but there are also some big investments ahead for GM.
The future looks bright
GM is focusing on expanding EV production internally and advancing autonomous driving through its subsidiary Cruise, of which GM owns about 80%. On the EV front, GM has secured the raw material to build 1 million EVs annually by 2025. And by that year, it expects to have a profit margin on the basis of earnings before interest, taxes, depreciation, and amortization (EBITDA) in the low to mid single digits.
The more exciting growth opportunity could be in autonomous vehicles, where GM's majority ownership of Cruise is providing an industry-leading position. Cruise has fully-autonomous commercial operations in three cities in the U.S. with more expected this year.
And the Cruise Origin autonomous ride-sharing vehicle is expected to launch later this year. Vehicles like the Origin should be lower cost than Uber (NYSE:UBER) or Lyft (NASDAQ:LYFT), which combined have over $35 billion in annual revenue, which we can use as a proxy for market size today.
UBER revenue (TTM) data by YCharts.
I think between EVs and autonomous vehicles, the future is bright for GM.
Value with a splash of growth
GM trades for only five times the midpoint of 2023 earnings guidance and has a growing number of EVs and a leading position in autonomous vehicles. You might feel that Tesla is a leader in the auto industry today, but GM is better positioned than most investors think.
I think the transition to EVs will take a lot longer than people believe, and trucks and SUVs will still be a big, profitable business even a decade from now. GM will have a cash flow core to build an EV business on and have time for Cruise to develop. Given the combination of value and growth potential, this is the one auto stock I would buy today.
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Travis Hoium has positions in General Motors. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.