Why General Motors Is Crushing Tesla in 2021

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Why General Motors Is Crushing Tesla in 2021

GM has been a better stock than Tesla in 2021, and that could continue.

Tesla (NASDAQ:TSLA) has been the talk of the auto and electric-vehicle (EV) stocks for most of the last decade and for good reason. The company has come to define electric vehicles and has done more to disrupt the auto industry than any company in a century.

But this year, it's General Motors (NYSE:GM) that investors are pushing higher over Tesla. You can see below that GM stock is up 46% in 2021, while Tesla stock is down 13%.

Six months doesn't make a trend, but this is a notable performance from GM and may show the market starting to value the products GM has been developing for years. It could also be argued that Tesla stock had become overvalued, but valuation has never held Tesla back before. So, how could an old, Detroit-based company beat Elon Musk and Tesla if the world is moving toward EVs and autonomous vehicles? GM's shift to EVs and its investments in autonomy may be driving the stock performance in 2021 and given recent announcements from GM I think the outperformance could continue for years.

9e1e6d7fffbdb539adcb72e8b9b20de9.png

GM DATA BY YCHARTS

Tesla's EV lead is shrinking
A few years ago, Tesla had a huge lead over the competition in electric vehicles. Manufacturers were still making vehicles with ranges of 50 to 100 miles even as Tesla was passing 300 miles of range with some models. It seemed automakers would never catch up.

Today, the competition is much more compelling for EV buyers; depending on what you value, Tesla may not be the best EV option. You can see in the table below that multiple EV models are on the market at a similar price point and range as the Model 3, with competitors coming to every segment of the EV market.

VehiclePriceRange
Tesla Model 3$39,990263 miles
Chevy Bolt$31,995259 miles
VW ID.4$39,995250 (estimated)
Ford Mustang Mach-E$42,895305 miles
SOURCE: COMPANY WEBSITES.

Tesla has been operating from a point of strength and differentiation in the EV market for years. But that differentiation has diminished, and companies like GM are coming into the market with compelling options. The Chevy Bolt was the first full EV from GM, but the Hummer EV, Cadillac LYRIQ, and the electric Silverado are on the way, and GM's shift into EVs is already eating into Tesla's lead.

9%2Fillustration-of-vehicles-on-road-with-autonomy.jpg

IMAGE SOURCE: GETTY IMAGES.

Tesla is way behind in autonomous driving, and GM is taking the lead
Autonomy is the other reason investors may see a brighter future at GM than at Tesla. On the surface, it appears that Tesla is a leader in autonomous driving because it has released some self-driving features to its vehicles with Autopilot and has collected data from millions of miles of customers driving, most of which is video and intervention data when Autopilot is active. In reality, Tesla is likely years behind competitors, in part because it's using a vision system while most competitors are using LiDAR technology in combination with vision and other sensors. Competitors like Cruise and Waymo also haven't autonomous features to the public -- and may never do so in passenger vehicles.

Research from firms like Navigant Research suggests that Tesla is behind Ford, Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Waymo, General Motors's Cruise subsidiary, and many other companies in both technology and strategy for autonomous driving. But we don't need to look any further than what competitors have submitted to regulators and are being approved for in the autonomous market to show how far behind Tesla is.

Earlier this month, GM's Cruise unit was the first company permitted by California regulators to operate self-driving, ride-sharing vehicles with customers and no backup driver. Seven other companies have also been given permits to test self-driving vehicles in California without a driver and with no passengers allowed. Tesla, which is based in the state, is NOT one of them. The company could be testing in states like Texas and Arizona, where it has operations, but Tesla has yet to report full self-driving data and it's unclear how technology that would enable driving without a driver is being tested.

The number of autonomous driving miles in California is also telling. After driving 12.2 autonomous miles with a safety driver in 2019, Tesla drove ZERO fully autonomous miles in 2020, according to California regulators. By comparison, Cruise and Waymo have driven more than 3.5 million combined autonomous miles in the last two years. Even Apple (NASDAQ: AAPL) has more autonomous miles than Tesla on California roads.

Company2019 Autonomous Miles2020 Autonomous Miles
Cruise831,040770,049
Waymo1,454,137628,839
Zoox67,015102,521
Apple7,54418,805
Tesla12.20
SOURCE: CALIFORNIA DMV.

Tesla has begun to admit publicly that its Autopilot feature is a driver-assist system not anywhere near a fully autonomous driving system. Car and Driver reported that Tesla's associate general counsel Eric C. Williams wrote the following in a letter to the California Division of Motor Vehicles (DMV): "Currently neither Autopilot nor FSD Capability is an autonomous system, and currently no comprising feature, whether singularly or collectively, is autonomous or makes our vehicles autonomous."

Williams even called Autopilot a Society of Automotive Engineers (SAE) Level 2 automation system, which is well below the Level 5 autonomy that Musk has been projecting for years (see fellow Motley Fool John Rosevear's article on the distinction between levels of autonomy here). Tesla is also far behind Cruise and Waymo, which are testing Level 4 autonomy.

The lack of fully autonomous testing on public roads in its home state shows that Tesla may not have the same ambitions in autonomous driving as GM (Cruise) and Alphabet (Waymo).

The market is betting on GM's future
Tesla is certainly growing revenue, and that will continue as it expands production. And we can't forget that the Tesla brand has a loyal following that may be willing to pay a premium for electric vehicles, even if features are similar to competitors. But as we look out five to ten years, it may be companies like General Motors that provide a bigger opportunity for investors, and that's what we're seeing the market react to.

In the next few years, GM's growing lineup of EVs will grow and fill parts of the market that Tesla can't with its limited lineup. The Bolt fills the budget need; the electric Silverado could do really well in the truck market; and the LYRIQ and Hummer are compelling in the luxury-vehicle market. And with ranges and costs that are competitive with Tesla, GM is catching and may potentially surpass Tesla in range and performance of EVs with some vehicles.

Long term, autonomous vehicles and autonomous ride-sharing could be the biggest growth segments in the auto industry, and it's clear that in the fully autonomous arena that Cruise has a lead over Tesla. And Cruise is already building a ride-sharing business with real customers. Tesla has been talking about robotaxis for years but isn't testing the technology in California, which doesn't appear to be anywhere near becoming a reality.

When you add in the fact that GM is more profitable than Tesla today, it makes sense that investors like the stock. In fact, GM's market cap of $88 billion is still less than 20% of Tesla's $583 billion market cap.

c2680e76ba6c755087079855c5acd386.png


GM MARKET CAP DATA BY YCHARTS

The tide seems to have turned for GM and against Tesla so far in 2021 as GM releases more EVs and autonomous features into the world. That's a relatively short-term move in the grand scheme of the auto business, but given their operating trends, I think GM's outperformance could continue. GM may not be the high-profile stock that Tesla is, but I think it's a great auto stock for the next decade, especially if Cruise comes to redefine personal transportation in metro areas.



SOURCE: THE MOTLEY FOOL

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This was a hard article for me to read, mostly because it feels extremely misleading. So i'll give my two cents on it.

But this year, it's General Motors (NYSE:GM) that investors are pushing higher over Tesla. You can see below that GM stock is up 46% in 2021, while Tesla stock is down 13%.
GM has had a steady increase in their stock since march 2020 where a lot of companies dipped at the beginning of the pandemic. Tesla's stock was overinflated last year, probably because Elon was in the news so much, people seen how much Tesla stock was going up and it was more of a hype buy for a lot of people. Even though Tesla stock has fallen this year, it's doing extremely similar to GM since last march.

Tesla's EV lead is shrinking
A few years ago, Tesla had a huge lead over the competition in electric vehicles. Manufacturers were still making vehicles with ranges of 50 to 100 miles even as Tesla was passing 300 miles of range with some models. It seemed automakers would never catch up.

Today, the competition is much more compelling for EV buyers; depending on what you value, Tesla may not be the best EV option. You can see in the table below that multiple EV models are on the market at a similar price point and range as the Model 3, with competitors coming to every segment of the EV market.

VehiclePriceRange
Tesla Model 3$39,990263 miles
Chevy Bolt$31,995259 miles
VW ID.4$39,995250 (estimated)
Ford Mustang Mach-E$42,895305 miles
Teslas lead is certainly shrinking but that's because Tesla has been building quality cars since the beginning. Tesla has a lot less room to grow with the current technology that's available. However, Tesla is the company that's putting money towards battery research, to make better batteries for every bit of advantage they can get in their vehicles, so they are still leading and continuing to improve.

Also if we are talking about Tesla being in the lead, I don't know why the article stops at batteries. Tesla has the safest vehicles on the market. No matter what Tesla you buy, you are getting one of the safest vehicles on the planet. We can also talk about Tesla's motors, they have the fastest 0-60 production car in the world and any Tesla you buy will have acceleration that is on par with high end sports cars.

Earlier this month, GM's Cruise unit was the first company permitted by California regulators to operate self-driving, ride-sharing vehicles with customers and no backup driver. Seven other companies have also been given permits to test self-driving vehicles in California without a driver and with no passengers allowed. Tesla, which is based in the state, is NOT one of them. The company could be testing in states like Texas and Arizona, where it has operations, but Tesla has yet to report full self-driving data and it's unclear how technology that would enable driving without a driver is being tested.
I've seen lots of videos of the self driving ride sharing vehicles and they didn't seem any more impressive than the current Tesla software. A big issue i've seen with Waymo is it can be extremely hesitant, something that Tesla is also working on but seems to have more success than Waymo.

I don't know why Tesla doesn't opt to do self driving ride share like Waymo and Cruise are offering, maybe they just don't want to go through the hassle when they are already getting a plentiful amount of data from their fleet of vehicles already on the road. While they don't have self driving vehicles at the moment, they are the only company that has a passenger vehicle for sale that can drive you around city streets while handling lights, stop signs, and turns without driver input. It's also nice that when a Tesla disengages, you can take over and keep driving. With self driving ride shares, you are stuck waiting for a technician to show up and move the vehicle.

It's hard to say where Tesla stands right now, I definitely would argue they are not behind, I believe they are ahead and it will be interesting to see the next software update to see just how far ahead they may be.

In the next few years, GM's growing lineup of EVs will grow and fill parts of the market that Tesla can't with its limited lineup. The Bolt fills the budget need; the electric Silverado could do really well in the truck market; and the LYRIQ and Hummer are compelling in the luxury-vehicle market. And with ranges and costs that are competitive with Tesla, GM is catching and may potentially surpass Tesla in range and performance of EVs with some vehicles.
This one is just not giving credit to Tesla at all. Right now GM has a budget vehicle and coming out with the rest of the lineup. Tesla has the rest of the lineup minus a truck and will be coming out with budget vehicle and a truck.

Bolt - Model 2
Silverado - Cybertruck
LYRIQ - Model X
GM will have a hummer and Tesla has the Model S Sedan.
Then Tesla also has the 3 and Y to cover the market in the middle.

Not sure why this article is calling Tesla's larger lineup 'limited'

and as for GM catching and may potentially surpass tesla in range and performance. That's a bold statement to say when Telsa just released a car with over 400 miles and 0-60 in under 2 seconds. I don't think any other electic vehicles on the market are even beating the Model Y yet in performance. I could be wrong but that's my guess.


Those are my thoughts on the article. I'd love to see more from Waymo in the future, but from the videos I seen, they drive kind of like how you expect a driverless vehicle to drive. Tesla works very hard to make the FSD drive kind of like a person. While caution is great, Tesla is taking that step towards a more aggressive self driving system, and I don't mean aggressive in a bad way, just that that it goes for those opportunities to pass cars if they are going slow, it will merge faster, and it's been hinted that turn hesitation was improved in the next update. It's amazing to be driving by a car in any capacity, but if a car feels like an actual person is driving, that's so much more impressive.
 
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Idaho_7

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Before "Investing" in GM: Probably should look up their Debt, Pension and Healthcare obligations. Probably should research their Real Estate Holdings and viability of same. Probably should look at both their Union Bloat and Quagmired, top heavy executives stumbling over themselves while trying to make decisions. If the economy continues to shrink or as it collapses by way of printing money/inflation, "Shorting" GM may be a better plan.
 
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TruckElectric

TruckElectric

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Tesla is way behind in autonomous driving, and GM is taking the lead
That's an interesting take. Hmmmm


Competitors like Cruise and Waymo also haven't autonomous features to the public -- and may never do so in passenger vehicles.
I can't understand this statement.


Research from firms like Navigant Research suggests that Tesla is behind Ford, Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Waymo, General Motors's Cruise subsidiary, and many other companies in both technology and strategy for autonomous driving.
I thought Tesla was ahead of everyone else.

The lack of fully autonomous testing on public roads in its home state shows that Tesla may not have the same ambitions in autonomous driving as GM (Cruise) and Alphabet (Waymo).
LOL
 

braddibbnd

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The "Fool" is just a stock advising outfit with many different contributors. Some of their articles this year were even advising 'buy/hold' this year even when TSLA was around 800/850. And I think most of the Cramer/Fool/et al are just piling on TSLA since the stock has dropped to around 600/620 after most of them were on the bandwagon. If you throw enough predictions at the wall, some of them will be correct.
I didn't see if the author was long/short GM or TSLA, but also interesting that GM announced yesterday they were increasing EV spending 30% in the next 5 years. And they won't be fully electric until 2035. What a tech leader. /s
 

Diehard

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I have owned several GM products and have been happy with most of them. I like the fact that they have already delivered on something Tesla promised long ago; affordable EV (relatively speaking). However the fair comparison will be two years from now when Texas and Berlin are on line and hopefully GM has a few more EVs out and none-Tesla charging infrastructure is a little less sucky. I have a feeling at that time Tesla will be able to produce cars faster and more profitably than GM. If Tesla production catches up with demand and they drop prices, GM may have a hard time to compete. If they don’t they will have a higher margin on what they do sell. GM has to sell at much larger scale to survive with lower margin. As a consumer, if GM makes a compelling product at a reasonable price, I would love to support them. It has been the heart of American manufacturing for years and it will be a shame for it to go out. That said, I will be highly surprised if Silverado EV can get me as excited as CT.
 

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"The Chevy Bolt was the first full EV from GM, but the Hummer EV, Cadillac LYRIQ, and the electric Silverado are on the way, and GM's shift into EVs is already eating into Tesla's lead."

I see this perspective over and over. ICE markets are one market and EV markets are a different market even though they are both automobile markets. I imagine it's neither the completely separate market idea and it's not as similar as it seems. I would guess that, broadly speaking, the earlier in the tech adoption life cycle it is a different product market.

EV purchasing is still in the early adopter phase.

1623950890316.png


The Big Three(ish) seek to support their large volume and revenue. They must sell evolutionary vehicles to the masses, in other words they pander to the early and late majority.

Initial EV offerings probably are about Tesla market share in the "EV" market. I think that idea will persist when it should shrivel and die as time marches on. As EV adoption increases, the difference to the majority buyer is the same as apples for apples. Do I want a Fuji or a Granny Smith or a McIntosh or Red Delicious? At that point, it's not a separate market and the market share the Big Three(ish) will be taking will be cannibalizing from itself. There's a lot to deep dive in there because each of the Big Three(ish) produce a different lineup (as well as by country).

Also, duh, if Tesla is selling 75% of the market, like @Crissa said, they'd need to 3 Teslas for each new Ford sold, then yes, they are eating into their lead. Again, that's only if we measure it as EV market which will be true only for a little while longer.

If someone copy's this idea and posts it on seekingalpha or Motley Fool or Yahoo!, then please tell me much you made. I feel like this is a YouTube reaction post and those seem to make a killing, lol.
 
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Crissa

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Yeah, it's entirely misleading.

For instance, they chose Tesla's peak price for the last year to start their chart.

Tesla hasn't needed to do independent autonomy testing because: Unlike all the others, they have a million installed units on the road shadowing data. No one else has that. The others are trying to testing their autonomy against a few dozen units at most, so of course they have to do testing on public streets.

Literally it's impossible for Tesla to maintain 'market share'. They are already building capacity faster than anyone else, but to maintain a 70-90% market share they could have to build it out 7 to 9 times as fast. That's just not even logical.

GM says it spends 6x the dollars in R&D than Tesla, and yet Tesla puts out more patents a year than GM does. https://www.vennershipley.co.uk/ins...-patent-philosophy-mean-they-are-free-to-use/
And compared to revenue, Tesla spends more than 3x as much at GM.

So maybe GM should be less profitable and figure out why they can't make half as many EVs as Tesla does in a year. Globally! So that includes the NEVs in China.

-Crissa
 

Sirfun

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If this were golf, today would be a 2 shot swing. :ROFLMAO:

teslavsgm.jpg
 
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As a previous GM customer, I trust them as far as I can throw them.

As far as investing in Tesla or GM. I’m glad I invested in Tesla back in 2017. My small investment will now pay for our Model Y, Cybertruck and if I wanted a Roadster or Semi.

If I had invested that same amount in GM, I could probably afford a Bolt.
 
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