Engine No. 1 LLC, an activist investment firm that successfully pushed for change at Exxon Mobil Corp., said Monday it is backing General Motors Co.’s bid to lead in the transition to electric cars.

In a white paper, the San Francisco-based investment firm said it believes GM and other traditional auto makers have the scale and know-how to drive electric-vehicle adoption. Engine No. 1 took a stake in GM in the first quarter but had not publicly outlined its thinking behind the move.

“The...

Engine No. 1 LLC, an activist investment firm that successfully pushed for change at Exxon Mobil Corp. , said Monday it is backing General Motors Co. ’s bid to lead in the transition to electric cars.

In a white paper, the San Francisco-based investment firm said it believes GM and other traditional auto makers have the scale and know-how to drive electric-vehicle adoption. Engine No. 1 took a stake in GM in the first quarter but had not publicly outlined its thinking behind the move.

“The scale of the [electric vehicle] transition challenge is beyond what Tesla and other new entrants can surmount in the time frame needed” to significantly reduce tailpipe emissions, the firm wrote. “Incumbent auto makers…are fully capable of becoming central players in the transition to [electric vehicles] and are also fully motivated to do so.”

The investment firm owned 397,000 GM shares as of June 30, according to FactSet. That would be worth about $22 million based on Monday’s trading price, a tiny stake relative to GM’s largest shareholders.

Engine No. 1 founder Christopher James said GM has an early lead on battery technology and is betting big on electrics, including its goal of largely phasing out gas- and diesel-powered cars by 2035. He said he sees GM as a rare example of an industry incumbent that is moving swiftly to stay ahead of disruption.

Mr. James said he has no plans to lobby for changes in strategy or board composition, as he did in his battle with Exxon. He said he wanted to formally express his backing to help mitigate the possibility that other shareholder activists could pressure GM to take a shorter-term view.

“We felt like just getting out in front of that and saying ‘This is the path to create long-term value,’ ” he said.

GM shares rose about 3% in morning trading Monday.

The statement of support comes ahead of a daylong investor event, planned for Wednesday, at GM’s research center in suburban Detroit. The auto maker is expected to detail its plans for plug-in cars and how it might boost profits from them.

Engine No. 1 said it has had “very constructive and collaborative two-way conversations with GM.” In a statement, GM said it is making progress toward an all-electric future but didn’t comment directly on Engine No. 1’s stake or white paper.

In a proxy fight with Exxon this year, Engine No. 1 leveraged a relatively small position in the oil company to secure three board seat for Mr. James’s candidates. The investment firm criticized Exxon for lacking a clear plan to transition to cleaner energy.

In contrast, Engine No. 1 has endorsed GM’s plans, an indication that it isn’t looking to take the same combative approach.

GM has gotten more ambitious about electric vehicles within the past few years, declaring earlier than many car companies that it plans to make an aggressive shift to plug-in models. In June, it pledged to spend $35 billion on the effort through mid-decade.

General Motors plans to phase out nearly all of its gas and diesel vehicles by 2035. Leading that transition is the first fully electric Cadillac. WSJ’s Mike Colias visited a GM testing site for a ride and an exclusive interview with GM President Mark L. Reuss. Photo Illustration: Alexander Hotz The Wall Street Journal Interactive Edition

The company’s bet on electric cars faces hurdles. Plug-in cars are currently more expensive than gas-powered cars because of the high cost of batteries. A shortage of places to charge cars also poses a barrier to adoption, analysts and dealers say.

GM also is grappling with a safety crisis on its lone electric vehicle on sale in the U.S., the Chevrolet Bolt. It has said it would spend roughly $1.8 billion to replace batteries in about 142,000 Bolts, citing the risk of the battery pack catching fire.

In its white paper, Engine No. 1 gives accolades to Tesla Inc. for driving early electric-vehicle adoption, but says the California-based auto maker and the growing number of electric-vehicle startups won’t be enough to achieve a meaningful reduction in emissions.

During her eight-year tenure as GM chief executive, Mary Barra has dealt with activist shareholders who pressed the company to take bolder steps to boost the auto maker’s valuation.

In 2017, investor David Einhorn pressured GM to divide its stock into two classes that would have separated the auto maker’s dividend from its operations. Shareholders voted down the plan.

Investor Harry J. Wilson also mounted a potential proxy fight in 2015 to get a seat on GM’s board, only to later drop the plan after GM agreed to buy back about $5 billion in shares.

GM shares have rallied over the last 18 months after largely languishing in the decade following its postbankruptcy IPO in 2010 and plummeting at the onset of the pandemic in early 2020.

Write to Mike Colias at Mike.Colias@wsj.com