1 No-Brainer Electric-Vehicle (EV) Stock to Buy Right Now (Hint: It's Not Tesla)

Although their adoption has been more gradual than many experts had predicted, electric vehicles (EVs) remain the future of the automotive industry. As technology evolves and newer, more innovative models roll out, adoption rates are likely to gradually improve over the next several years.

There's one stock, in particular, that stands out when it comes to EVs, and it isn't the one you might be thinking of. I'd go so far as to call General Motors (NYSE: GM) the biggest no-brainer stock to buy in the entire automotive industry.

A solid No. 2, and that's a big win

General Motors isn't the top-selling EV brand in the United States -- no company is going to wrestle that title away from Tesla anytime soon. But over the past year or two, GM has emerged as the clear No. 2.

Image source: Getty Images.

In the third quarter, not only did GM sell 67,000 electric vehicles and claim a 16.5% market share in the United States, but its market share grew by more than any other automaker. Simply put, GM is producing EV models that resonate with consumers.

The Equinox EV is the best-selling electric vehicle in the U.S. that isn't made by Tesla. Cadillac's EV market share is accelerating, thanks to several successful model launches. It's now the No. 1 luxury EV brand in the U.S. so far this year with three of the top 10 luxury EVs in the market. In her letter to GM shareholders, GM CEO Marry Barra reiterated that while GM has slowed its EV plans down a bit in response to market conditions, they remain the company's "North Star."

Fantastic execution

To put it mildly, the third quarter was a great one for General Motors throughout the automaker's business. In addition to the EV momentum discussed earlier, GM's crossovers and SUVs sold at an all-time record pace in the quarter, and the company's top- and bottom-line numbers came in better than analysts had expected.

GM's often-overlooked software and services business, which includes the Super Cruise self-driving platform and OnStar, has generated $2 billion in recognized revenue and $5 billion in deferred revenue year to date, which is 90% year-over-year growth.

Remarkably, GM's strong sales momentum has come without offering excessive incentives. In fact, the company's brands are so strong that its incentive spend as a percentage of vehicle price was 3 percentage points below the industry average.

Because of its incredible results and continued strength, as well as improved visibility into tariff impacts, GM raised its full-year guidance significantly. It now expects about $10.5 billion in free cash flow at the midpoint of its guidance range, nearly $2 billion more than previously expected.

Thanks to its improved tariff visibility, GM resumed share buybacks at an aggressive pace, spending $1.5 billion in the third quarter to buy back nearly 3% of the company's outstanding shares. With $2.8 billion remaining on the current authorization, it's fair to assume that buybacks will continue through the fourth quarter, as well.

A no-brainer buy right now

To be fair, there are still some unanswered questions, especially considering that the federal EV tax incentives, which were in effect during the third quarter, no longer exist. But GM is making all of the right moves to thrive, despite the non-subsidized EV market. It's onshoring more of its production, focusing on brand building and delivering EV models that resonate with consumers, and still putting lots of effort into its high-margin gas-powered vehicles.

Even after the post-earnings rally, GM trades for roughly seven times forward earnings, and that's a ridiculously low price to pay for a company that's executing so well. GM is one of the largest stocks in my own portfolio. Not only do I not plan to sell a single share, but I expect to gradually build my position even further based on these strong results.

Matt Frankel has positions in General Motors. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.