Is GM a Good Stock for the TaaS Investor

Unlike my last update on Tesla as a TaaS investment, the case for General Motors is less obvious. In a little less than two years, my total unrealized gain on Tesla is just under 500%, and a slightly less than 200% compound annual growth rate. My GM performance has not been quite as impressive. I’ve owned GM shares since January 2017, acquiring additional shares in September 2017, with an acquisition of more shares in May 2018. During my ownership of GM, I’ve also sold a few shares as well. Shares were sold in late December 2019, with another portion of shares sold in early January 2020. My total return on GM stock has been -9.3% as of October 2 with a -3.8% compound annual growth rate.

The reasons I’m still an investor in GM today are very similar to why I own Tesla. I believe General Motors will be a player in a future $8 trillion TaaS industry. In fact other than Tesla, I believe GM is better positioned than any other company in the world to take advantage of a future mobility future. Unlike Tesla’s valuation of $387 million, GM’s valuation is only $44 million with a lot of upside potential. Some may argue that GM’s valuation today is warranted. But this valuation ignores the company’s significant R&D, experience and commitment to electric vehicle and battery development along with autonomous vehicle technology. No other company (other than Tesla) is further along with this combination of necessary competencies. I’ll explain more detail in future newsletters. Broadly, however, GM has key attributes necessary to compete in a future TaaS world.

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