GM released its fourth-quarter and full-year 2019 earnings this morning, which revealed that the company took a massive if predictable hit from the UAW strike, but also that the company still made $6.7 billion last year. Not a bad return, all things considered, but shareholders were unimpressed. CEO Mary Barra then tried to convince anyone who would listen that GM is a technological leader.
That is opposed to Tesla, of course, the stock of which has been on a huge surge in recent weeks, closing Wednesday at $734 per share, or over 20 times as much as GM’s, which closed at $34, a number which it has been hovering around for the past decade. Tesla’s stock had been in a similar stall since it went public, generally staying in the $100-$400, until the recent surge, when it almost eclipsed $1,000.
A big part of that surge has been that investors value Tesla like they value a technology company, and they value GM as an automaker. The theoretical ceiling for technology companies is something like what Apple and Google are, trillion-dollar or near-trillion dollar behemoths, or about nine times what Tesla is currently worth and twenty times what GM is.
The ceiling for automakers, on other hand, currently looks like Toyota, worth $230 billion, or less than a quarter of Google’s parent company Alphabet.
It’s in this vein that Barra said Wednesday that 2020 would definitely, definitely be GM’s year to turn the corner on all this technology and innovation.
Chief Executive Officer Mary Barra’s team spent the next four hours at its Capital Markets Day event in New York making a full-throated pitch that the company is prepared for the electric, self-driving era.
“We are investing heavily in the technology and innovation that will help us realize our vision,” Barra said in her opening comments. “I truly believe that 2020 is the year when all of our work comes together and we move forward with integrated solutions that will be the groundwork for reinventing how we deliver mobility to our customers.”
What does that even mean? At least when Elon talks he says something simple like all his cars are going to drive themselves and he’s going to make another factory again. Barra gets up and says she’s going to “move forward with integrated solutions” and we’re all supposed to be surprised investors aren’t psyched.
GM President Mark Reuss at least got a little more specific in his own comments at the event, claiming that the electric Hummer would be the first electric truck on the market, according to Motor1, which would mean possibly sometime this year, as Rivian has said it might also deliver its first electric trucks this year. But that felt like a misstatement if anything, given that GM said in November that its first electric truck wouldn’t arrive until fall of 2021.
It doesn’t really matter in any real sense, in any case, since GM will be judged ultimately not by telling everyone it is going to be a tech leader but by simply making the technology and selling it and letting the market decide. There is no legacy carmaker better-equipped to make good electric vehicles than GM, especially trucks. But that has been true for about a decade now, ever since the first hybrid Volt rolled off the production line in 2010, a couple of years before the Tesla Model S, if not earlier with the GM EV1, or the Chevy S-10 EV pickup of the 1990s.
Tesla has had more than a few bumps in the road since then but you can’t argue with the results, while in that time GM has given us the Bolt. If GM is now mad that no one perceives it to be tech leaders, it has only itself to blame.