What happened
Shares of General Motors (GM -0.57%) were moving higher last month as the automaker gained following bullish comments at an industry conference and as investors cheered its decision to adopt Tesla's electric vehicle (EV) charging standard, known as the North American Charging Standard (NACS), starting with its 2025 EVs.
Additionally, GM seemed to benefit from an improving macroeconomic picture and a generally rising tide in electric vehicle stocks as other EV companies moved to adopt NACS, eliminating a potential pain point in EV adoption.
According to data from S&P Global Market Intelligence, the stock finished the month up 19%. As you can see from the chart below, most of those gains came in the first half of the month, benefiting from the NACS news.
So what
The stock got off to a hot start in June after CEO Mary Barra said at the Bernstein Strategic Decisions Conference that she believes its EV business, which is currently unprofitable, will reach double-digit margins, and that GM has an advantage over EV start-ups due to its scale. She also said she expected a number of EV start-ups, especially in China, to fail, implying that many won't reach profitability. The stock rose 4% on June 2 as those comments came out.
The stock got another boost after Barra made a surprise announcement that the company would adopt Tesla's charging standard. In addition to that agreement, Tesla will support charging for GM EVs at at least 12,000 Tesla Superchargers, and GM will integrate the Tesla Supercharger Network in its mobile apps and vehicles, helping its drivers locate and pay for charging.
Morgan Stanley's Adam Jonas cheered the move, saying it will help GM control costs by reining in the need for it to build its own charging network, and allows the company to invest in areas where it can add value.
Additionally, excitement around GM's Cruise AV division seems to building as robotaxis proliferate in San Francisco, and Barra speculated that Cruise could generate $50 billion in revenue by $50 billion by 2030.
Now what
In early July, GM got another boost as it reported strong sales results in the second quarter with U.S. sales up 19% to 691,978 vehicles and all four of its brands experiencing double-digit growth.
GM stock continues to look cheap even as the overall business has promising growth drivers like EVs and Cruise. While the international business is struggling, the stock looks to be a good value, trading at a price-to-earnings ratio of less than 6. With momentum building in multiple areas, this auto stock deserves a closer look.
