Electric car stocks may very well be in a bubble. Tesla (NASDAQ:TSLA) stock has rocketed around 600% this year, pushing up the market capitalization of the Elon Musk-led automaker to roughly $540 billion. That's over 20 times annual sales and nearly 35 times book value. Tesla is now profitable, but largely due to the sale of regulatory credits. Tesla's price-to-earnings ratio is so high it's not even worth mentioning.

Yes, Tesla does more than make cars. And yes, there's a cult following and intense loyalty surrounding the brand. But ultimately, Tesla is much more an automaker than a tech company. It's valued like Google when it should be valued more like Ford.

There are other electric car stocks that have defied reality this year as well. Chinese electric car maker NIO is now worth over $70 billion despite delivering just over 12,000 cars in the third quarter. Nikola is still worth over $10 billion despite accusations of fraud and having no revenue at all. Shares of electric truck company Workhorse have shot up nearly 800% this year and are now worth over $3 billion, despite barely any revenue and a production target of just 1,800 vehicles for 2021.

If this isn't a bubble, then I don't know what is.

If you buy any of these EV stocks, there's a very good chance you're going to lose your shirt. Now, I could be wrong. Maybe, somehow, making cars electric will fundamentally change the economics of the capital intensive, cyclical, brutally competitive automobile industry. But I seriously doubt it.

A GM car.

Image source: GM.

This is the EV stock to buy

If you want to invest in electric cars but don't want to be exposed to what looks like a massive bubble, there's still a very good option available: General Motors (NYSE:GM). GM is pouring $27 billion over the next five years into electric and autonomous vehicles, and there's just no reason to believe the storied automaker will be run over by its younger rivals.

GM's plan involves launching 30 electric vehicles globally by 2025, with over two-thirds of those vehicles set to be available in North America. All of GM's major brands -- Cadillac, GMC, Chevrolet, and Buick -- will have EV models available, and GM is promising options across the full spectrum of price points.

This plan hinges on GM's Ultium battery technology. The company has already achieved a nearly 40% reduction in battery pack costs compared to those in its Chevrolet Bolt EV, which launched a few years ago and found some success. GM expects its next-generation Ultium batteries, expected to be available by mid-decade, to double the energy density of today's batteries at half the cost.

On top of pouring resources into electric vehicles, GM is already ahead of the game when it comes to driver assistance systems. In October, Consumer Reports concluded that GM's Super Cruise system was at the top of the heap in its test of 17 systems. While Tesla's much-hyped Autopilot scored highly for capabilities and performance, Tesla lost badly to GM in other areas, including keeping the driver engaged, making it clear when it's safe to use, and dealing with an unresponsive driver.

Another thing to remember: GM is profitable now, while other EV companies may never stop burning cash. GM produced over $4 billion of net income in the third quarter on $35.5 billion of revenue. GM stock has tripled since bottoming out in the pandemic-driven sell-off earlier this year, and shares still trade for less than 10 times the average analyst estimate for full-year earnings, and less than 8 times the estimate for next year's earnings.

If you want to gamble, buy one of the bubble EV stocks that have gotten so much attention this year. If you want to invest, buy GM stock.