This Massive Automaker's Stock Can Still 10x

General Motors (GM 5.46%) filed for bankruptcy in 2009, but over the past 13 years, the automaker has been thriving. In this clip from "The Rank" on Motley Fool Live, recorded on March 21, Fool.com contributors Matt Frankel and Jason Hall discuss several of the company's major initiatives -- including electric vehicles -- that have it primed for sizable growth in the next 10-15 years.

Matt Frankel: A lot of people think of this as a boring legacy company. A lot of people, General Motors went bankrupt about a decade ago, and a lot of people still have gotten that bad taste out of their mouth. There's a lot of reasons I like General Motors going forward. The next two or three years are going to be the most transformative in our history in terms of mass-market electric vehicle adoption. Not just with General Motors, just across the board.

I think there's something like five realistically attainable electric vehicle models on the market now, that number is going to shoot up to about 50 in the next two years. I think GM has a big advantage when it comes to EV adoption. We've all heard the headline numbers, they are investing $35 billion in EV development. They want to be the leader in the U.S., but they're the only of the major American car companies with a proprietary battery system, first of all, that is actually showing promise, the Ultium battery platform is roughly 25% smaller and lighter than competitors. Meaning they can cram more batteries into each car and make them go further.

I think a lot of people are just really overlooking the brand loyalty that GM commands. I don't know if either of you have ever driven a pickup truck, but those are the most loyal customers in the world. Someone who drives a Dodge Ram wouldn't buy a Silverado if it was free. You're going to tell me that Silverado owners are going to ditch Chevy to buy the Cybertruck? No, not absolutely not. They're going to get the Silverado EV as soon as it's available.

I think that's being very overlooked. I think Cruise has a massive opportunity, which GM owns, about 80% of. The minority investors are Microsoft (MSFT 1.47%), Walmart (WMT -2.38%), and Honda (HMC -0.06%) by the way. Pretty good company to throw money into this thing. They are about to be able to charge for driverless cab rides in San Francisco and plan eventually to roll that out across the nation.

They think the worldwide market for autonomous ride-hailing, essentially an autonomous Uber (UBER 2.50%) is about a $5 trillion market worldwide. That might be a little ambitious, but this is a huge opportunity. Autonomous freight, BrightDrop is GMs autonomous freight division. FedEx (FDX 0.94%) is buying vehicles from them. There's a bunch of other adjacent businesses they're pursuing too. OnStar insurance for one. Their OnStar brand that they're rolling out insurance products. Defense applications of their electric vehicles, which they think alone could bring in $25 billion of revenue for the company.

GM is one of our smaller companies that we're talking about right now. Market capital is about $63 billion today, trading for 6.5 times earnings, not sales like you're going to hear with a lot of these stocks, 6.5x earnings. With that, that's why I ranked this No. 3. I think this has a much better-than-expected shot to 10x over the next decade or so. If it does so, it will still be smaller than Tesla (TSLA 2.77%) is today, and I want you guys to tell me why I'm wrong now.

Jason Hall: I have some other reasons why you could be right too. I think the reason you're most likely to be right, Matt, is Cruise. I really do. I agree with that. They just upped their stake. Another almost $1.5 billion investment to bring their investment data. That was Friday that just got announced.

Frankel: They bought out Softbank (SFTBF -0.22%).

Hall: Yeah, so that's exciting to me. I think of the automakers. The large automakers, especially the legacy ones. I think it definitely has the best multi-bagger potential, almost entirely, because of Cruise. Because at the end of the day you think about EVs. Ford (F 0.39%), I think is doing things a little faster, especially with pickups, they're going to be making their F150 Lightning this year. They're going to be, they've sold out capacity for two years already.

Here's my reasons not. No 1, despite the benefits of Cruise and that high-margin revenue, that could be substantial. It's also tied to the way vehicle ownership and usage is probably going to shift, particularly for younger generations. This is an industry that's been around for a century. What have we learned in that century is that, if you get high single-digit operating margins, you're doing really good.

It's also a really cyclical industry because it's driven by consumer demand and for market-to-market, it can be very cyclical. I think it's really going to be hard for GM to 10x from here, particularly as we see more global upstarts in EVs that we're getting lots of push by the countries they operate in like China, for example.

They're going to take a pretty substantial market share where a lot of the total growth around the world is. In a lot of ways I think it's, I don't want to say it's zero-sum, but I think it's going to offset their shrinking gasoline and diesel business in their most important markets today, and maybe be a little more profitable. I'm just not sure they're going to be able to take enough market in the growing areas to be a 10x stock from here.

The last reason why maybe is we shouldn't sell on the dividend and the ability to grow the dividend and for that to be part of the total returns fixture. Because over 15 years, that can be a lot of money from a company like GM as they reimplement and raise and raise that dividend over time.