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by SR2Z
1398 days ago
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I highly supect that GM is undervalued. They were one of only two companies to sell enough EVs to disqualify themselves for the old tax credit, they're heavily invested in mass production of more, you don't need to worry about Elon Musk tweeting something dumb and tanking the stock, and they majority-own Cruise who are way closer to self driving than Tesla probably ever will be. Despite all that their market cap is less than a tenth of Tesla's. Until 2008, it was the biggest car manufacturer in the world and in raw technical ability they're probably better than Tesla. I'm biased because I own a lot of stock already but I still think there's money to be made on it. |
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First, they have poor to negative brand equity for some customers.
My family always had Japanese and Korean cars, so when I think of GM, I think of the ugly Cavaliers that so many of my classmates got as first cars in high school, and their long string of equally mediocre descendants. How do you beak that impression? Hyundai did it by giving out enough warranty that people didn't need to trust that the cars were built to last.
For EVs, I could almost see a case for a new psuedo-independent brand like Saturn. You don't need to remind people of those rusting old Chevys, but maybe there's a vague reminder that the endeavour is backed by Daddy GM's finances and infrastructure, so it's a less risky choice than buying a Lucid or Rivian and hoping the firm's still there in five years. Reinventing Hummer is an interesting take on it, but it's hardly selling to the people thinking "I can get the Prius, the Niro, or spend a little more and go full-electric and get even BETTER TCO on my grocery-getter." It's a shame they spun off Electro-Motive-- the branding would have been perfect.
Second, being a large player limits their ability to milk the growth narrative. Tesla can be overpriced (and as someone with WAY too much tied up in $TSLA, it freaks me out), but people can keep treating it like they're buying into the "future #1 brand" rather than the "already #1 brand with only downwards to possibly go"