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An Electric Move for General Motors

GM plans to sell 20 EV models by 2023.
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When it comes to electric vehicles, General Motors (GM) probably isn't the first name that comes to mind. Tesla (TSLA) owns that spotlight, and receives an astronomical valuation for its status as the star of the EV sector. 

Meanwhile, GM trades at about 7x trailing earnings. In terms of valuation, these two stocks are not in the same universe. However, now that GM is making a significant move into the EV space, some investors are wondering if the automaker deserves to trade at a higher multiple. 

GM chart via TradeStation

GM chart via TradeStation

The market seems to agree. GM broke out in a big way on Tuesday, roaring to a six-month high on heavy volume. The stock rocketed out of a bullish formation known as a cup and handle pattern. Based on the size and duration of the pattern, the stock should continue to climb into the low to mid 40's. 

In a bold move, GM has resurrected the gas-guzzling Hummer as an EV. It's a smart move because it combines the name recognition and reputation of the notorious Hummer with the advantages of an EV. If the Hummer is a hit, it opens the door for an entire range of GM EV's. 

It may come as a surprise to learn that GM plans to sell 20 EV models by 2023. The automaker is going all-in on EV's, and it if succeeds, investors will long for the days when the stock traded with a single-digit valuation. 

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Ed Ponsi is the managing director of Barchetta Capital Management, and is the author of three books for publisher Wiley Finance. A dynamic public speaker, Ed has made appearances around the world, in such diverse locations as Singapore, Dubai, London, and New York. For more information about Ed and his work, click here