Key Points
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General Motors has significantly decreased the number of its outstanding shares and increased earnings per share.
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A Detroit-based automaker has poured billions into its brands and vehicle offerings.
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Additionally, leadership has effectively reorganized its operations in China.
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10 stocks that are more favorable compared to General Motors ›
When thinking about General Motors (NYSE: GM), many investors look back on the financial crisis and government bailout, but that fails to reflect the company GM has evolved into over the years. GM is doing numerous things well, and it is quietly becoming arguably thebest automotive investmentout there. Here are three explanations.
Returning value
When it comes to providing returns to shareholders, there are two main options: dividends andshare buybacks. Each has its benefits, but General Motors has chosen to focus heavily on stock repurchases, with its shares trading at a meager eight timesprice-to-earnings.
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General Motors has been heavily involved in stock repurchase initiatives throughout the last ten years. The Detroit-based automobile company has regularly utilized robust free cash flow, combined with the conviction that its stock is significantly undervalued, to notably decrease the number of outstanding shares and enhance earnings per share. You can observe the dramatic shift in the chart below.
The automaker has invested almost $25 billion in stock buybacks during the last three years, decreasing the number of outstanding shares from 1.5 billion to 950 million during that time. This is a substantial and serious sum of money used to repurchase shares, especially considering GM’smarket capApproximately $50 billion. While GM’s stock is inexpensive, the company repurchasing its shares benefits investors, and this situation is expected to remain unchanged in the short term.
Investing in brands/product
General Motors has invested billions of dollars and numerous years into its range of brands and vehicles, and the efforts are beginning to show results. Chevrolet, the core of General Motors, along with GMC, have both experienced success in 2025, with GMC achieving a record first half and Chevrolet seeing its best performance since 2019.
The brands, along with GM as a whole, have recently launched a series of new models including updated crossovers, SUVs, and electric vehicles — and its very successful trucks are next.
Chevrolet is also launching asplash in the electric vehicle market, becoming the second-largest brand during the second quarter, coming after onlyTeslaIn the U.S. market, July marked the highest sales month ever for the Equinox EV, and it represented the best sales performance for an electric vehicle excluding Tesla in the U.S. market. The Equinox is expected to rank in the top three for sales in 2025, coming after only Tesla’s Model Y and Model 3.
From a larger perspective, General Motors has made significant investments in its products and brands, which will help maintain sales growth for many years ahead.
A turnaround in China
For decades, China has served as a dream destination for car manufacturers: a growing population eager for vehicles. However, foreign automakers have faced challenges as local brands have flourished in recent years—so much that a fierce price competition has emerged, making it difficult for even top foreign cars to maintain profitability and market presence.
General Motors once experienced significant success in China, contributing billions to its profits at its height. However, this price competition affected GM severely, prompting the company to revisit its approach with a roughly $4 billion restructuring plan. The strategy is showing results, as GM recently reported a second straight quarter of rising sales, with a 20% increase in Q2.
Our solid Q2 results demonstrate the steady growth path we are establishing in both sales and market share through local innovations,” said Steve Hill, senior vice president and president of GM China. “We continue to be dedicated to achieving profitable growth for our China operations by emphasizing effective execution, business flexibility, and a wide range of customer options.
What it all means
General Motors has been making several positive moves recently, even though Wall Street hasn’t taken notice. The company has invested tens of billions of dollars in decreasing its number of outstanding shares, and has allocated billions into…investments in brands and products, and addressed one of its major vulnerabilities in China. General Motors is repurchasing its shares at low prices, and it’s time for mainstream investors to start doing the same.
Is it a good idea to invest $1,000 in General Motors at this moment?
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Daniel Millerholds positions in General Motors. The Motley Fool holds positions and suggests Tesla. The Motley Fool advises on General Motors. The Motley Fool has adisclosure policy.
