Are these the best automaker value stocks of 2024?

Electric vehicle (EV) stocks are not a value investor’s playground. Tesla (NASDAQ:TSLA) has a high valuation multiple, while Nio (NYSE:NIO) has no earnings and therefore no price-to-earnings ratio (P/E).

However, there is one EV-participating asset that, while not a pure EV stock, is worth considering in the new year. Despite the company still reeling from the now-resolved auto workers’ strike, General Motors (NYSE:GM) presents a value proposition that enterprising investors shouldn’t ignore.

General Motors’ New Year’s Resolution: Get Thinner

Just as many people are resolving to lose weight in 2024, General Motors (GM) clearly has a New Year’s resolution to lose weight to cut down on spending. This is virtually inevitable because General Motors (GM) must pay higher wages to workers under the United Auto Workers (UAW) negotiations.

Job cuts have become routine since COVID-19, so it won’t shock anyone to learn that General Motors (GM) is making new workforce cuts. As unfortunate as it may be for the laid-off workers, job cuts may be necessary for General Motors’ long-term survival.

The latest developments include: First, Reuters reported that General Motors (GM) plans to reduce 24% of the workforce in its cruise division, which specializes in self-driving cars. These layoffs “reflect a new future and a more deliberate path to market, which means less immediate need for field, commercial operations and corporate personnel,” General Motors explained.

GM shareholders shouldn’t complain too much about this. The cruise division lost more than $700 million in the third quarter. Moreover, with the company losing more than $8 billion since 2016, it wouldn’t be a bad idea for General Motors to cut some of the fat from its self-driving car business.

In addition to the Cruise division, General Motors (GM) is pursuing layoffs at its Michigan plant. Specifically, the automaker announced plans to lay off 1,000 employees at its Lake Orion production facility and more than 300 employees at its Lansing Grand River facility.

“The layoffs suggest that GM is bracing for tougher times ahead,” Barron’s report concluded.

However, this may not be the correct conclusion. Because General Motors is simply responding to more difficult times materializing in the rearview mirror. Again, General Motors is still dealing with financial losses from the Auto Workers strike, even though the dispute has been resolved.

General Motors Stock: Attractive Value for EV Investors

It’s clear that General Motors (GM) is putting the brakes on its cruise business, but that doesn’t mean it’s giving up on new energy vehicles. In fact, automakers are pursuing promises to phase out internal combustion engine (ICE) vehicles by 2035.

While GM CEO Mary Barra signaled some flexibility, she made no bones about the company’s roadmap for the coming decades.

“We plan to only sell EVs, light-duty EVs at the time, but we will respond based on where our customers are, but we have plans to do that,” Barra said.

Moreover, she is not all talk and no action. General Motors is taking concrete steps to promote the development and adoption of clean energy vehicles, including collaborating with Japanese construction equipment manufacturer Komatsu to develop a mining truck powered by hydrogen fuel cells.

Additionally, GM is adding new angles to its legacy vehicle brands. The company recently announced an electric Cadillac SUV called VISTIQ. According to John Roth, Vice President of Global Cadillac, this new vehicle “adds another compelling EV to the Cadillac lineup, strengthening our commitment to an electric future.”

This addition could prove to be a timely entry into the General Motors EV portfolio, as Roth claimed that 60% of consumers are “looking for an EV in their next purchase.”

“We have a lot of demand for Escalades and luxury SUVs, or EVs,” said GM President Mark Reuss. “We know that.”

Consider GM Stock for Good EV Market Value

General Motors is trading for about five times its trailing 12-month earnings as measured by GAAP, which looks like a steal at its current valuation. The same certainly can’t be said for pure EV manufacturers like Tesla or Nio.

Moreover, even though it doesn’t exclusively manufacture EVs now, General Motors plans to reach that level by 2035. So, if you are optimistic about the future of new energy vehicles and are in the market for good value, consider taking a position. Invest in GM stock before the end of the year.