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Yesterday, December 16, I made General Motors (GM) Bargain Pick #7 in my Special Report: 12 Bargain Stocks Picks NOW. (That Special Report is available to subscribers to my JubakAm.Com paid site.) And I also added it to my Jubak Picks portfolio.

On the bargain front, I think the argument is persuasive. I wrote:  “Morningstar calculates that shares of General Motors are trading at a 27% discount to fair value. The progress that General Motors has made in quality, in its SUV lineup (to go with a strong truck lineup), in reducing costs, and in teeing up a big push in electric cars (the company has announced for example, that most Cadillac models will be electric by 2030) doesn’t get much love from investors. (On December 12 the shares were trading at a trailing 12-month price to earnings ratio of just 5.88. The S&P 500 trades at a forward PE ratio of almost 18.) A recovery or even signs of a recovery in the Chinese car market is likely to be enough to turn the trick for GM. The company is the second biggest international automaker in China by sales, selling 3.64 million units in China last year. But that was down from sales of 4.04 million units in 2017. In the third quarter GM delivered 689,531 vehicles in China. The drop for the quarter ended September 30 marks the fifth straight quarterly sales decline for GM in China, the world’s biggest auto market. Total industry auto sales in China fell for a 15th consecutive month in September with a year to year decline of 5.2%. That followed on a 6.9% drop in year over year ales in August. The Chinese auto industry has predicted a second half turnaround for months now with each month’s disappointing result postponing the good times. A U.S.-China trade deal wouldn’t turn sales around immediately, but it would put some more growth back in China’s overall economy and that would gradually lead to higher car sales.”

But I think there are other arguments in favor of this stock too.

The company looks to have finally moved off the dime in electric cars. (Which includes killing the hybrid Chevy Volt.)

The biggest piece of evidence on that arrived on December 5 when General Motors and Korea’s LG Chem announced that they would invest $2.3 billion in a new joint venture that will mass produce battery cells for electric vehicles. (This is a major step up from the company’s $28 million investment in its Warren, Michigan, battery lab announced last year.)

Now Tesla (TSLA) had sold 720,000 electric cars since 2012 as of the second quarter of 2019 versus 200,000 sold by General Motors since 2010 by the end of 2018.

But going forward, the big differentiation in my mind between the two companies is that General Motors knows how to run assembly lines and Tesla is still struggling to master profitable mass production. (The other big difference is that General Motors’ management is focused on making a profit from making cars. Tesla and its founder Elon Musk wants to make batteries, solar cells, space craft, and cars.)

Tesla does indeed seem to be ramping up the volume of cars that it can make and deliver in a quarter but the evidence points to disorganized production floors, high rates of worker injuries, and a need to use Big Leap Forward style mass worker mobilizations to meet production targets. That has resulted in losses falling relatively slowly as even very high prices have not resulted in profitability. The Model X crossover released in late 2015 starts at about $85,000, but averages much higher with options. The Model S sedan’s starting price is about $80,000. The Model 3 sedan starts at $39,490. Trailing 12-month earnings per share were a loss of $4.77. The stock therefore trades at an infinite price to earnings ratio and has a market capitalization of $68 billion.

General Motors, ol’ stodgy General Motors, earned $6.14 a share in the trailing 12 months. It has a market cap of just $52 billion and pays a 4.21% dividend. (Sorry the last dividend date was December 5. You’ll have to wait until next quarter to collect.)

The reviews I’ve seen argue that the GM Bolt trails Tesla models in areas such as “peppiness,” interior fit, and features. But the MSRP on a Bolt is also just $37,495 or $41,780 for the Premier model. And I think those problems are all fixable.

I think electric cars are potentially a huge growth market–global warming and all that. But the big question is going to be who can get the costs down fast enough to make money at a lower price point? This will become an even more important question if, as scheduled, electric car subsidies vanish in 2020. Whatever the cost and manufacturing story at Tesla, I’d bet that General Motors has a better shot a making the cost and manufacturing goals needed to grab a big share of this market.

Which is why, as of December 13 I’m adding General Motors to my Jubak Picks portfolio with a target price of $46 a share.