General Motors recently revealed a new corporate campaign and new logo for only the fifth time in its history. Normally when a company or brand resorts to a revised logo, my initial thought suggests a company fresh out of relevant ideas for their products or their brands. This time seems different for GM. Today during CES, the company launched an all-new delivery and logistics business, BrightDrop. The first products from BrightDrop are an electric delivery van (EV600) and a “last mile” electric delivery pallet called EP1. BrightDrop’s first announced customer is FedEx, with others thought to be in the pipeline.
Since the arrival of Mary Barra as GM’s CEO in 2014 and after becoming Chairman in 2016, GM has been quietly developing credible electric vehicle, battery and autonomous vehicle technology more advanced than any other automaker with the possible exception of Tesla. While Wall Street mostly ignored GM’s earlier public announcements of their Zero Crashes, Zero Emissions and Zero Congestion initiatives, the company continued developing new electric vehicle architectures, new advancements in battery technology, more autonomous driving capability, together with commitments to attack important markets with electric vehicles in key regions like North America and China.
I wrote about this last year in April during the middle of the pandemic-driven, automotive business shutdown. One month prior to that article, GM stock closed to a post-IPO low of $16.80 per share on March 18. Today, GM stock closed at an all-time high of $47.82 per share driven by the latest commercial EV news, a 185% gain from those lows. Wall Street’s gradual change in conviction about GM is driven also by how the company’s core business has proven to be very resilient throughout the pandemic. GM saw its best fourth quarter of retail vehicle sales last year since the fourth quarter of 2007 due to the popularity of its very profitable full-size pickup trucks and full-size SUVs. This follows a $6.58 billion profit in 2019 which included conducting its business during a 40-day labor strike. While some may discount the value of GM’s traditional automotive business as the company pushes toward an electric vehicle future, without the profits from their traditional business the company could not fund its electric vehicle future.
Tesla rightfully gets a lot of attention as a pure-play electric vehicle company with a significant head start over many legacy automakers. However, the history of new markets and disruptive forces impacting an industry like automotive suggests there will be several winners. The future of automotive will not be a zero-sum-game of Tesla winning and all other losing. It seems to me that General Motors will be a major player in a future world of electric vehicles, autonomous capability and mobility solutions.
I own shares of GM stock as well as Tesla stock.
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TaaSMaster, LLC is not a registered investment advisor or broker/dealer. All investment opinions expressed by TaaSMaster, LLC are from personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors may occur.