Now GM Wants To Be A Technology Company
Did you hear the latest?
It is amazing how the media seems to give Mary Barra a pass on, well, everything. She is a total con artists which, when it comes to corporate CEOs, that is saying something.
She is noted for her claims that GM will overtake Tesla in EV deliveries by 2025. This is now delayed. She is also known for being pointed out by President Joe Biden for having "led". He was referring to her leading the US into electric vehicles, overlooking Tesla completely.
Of course, the last one wasn't exactly her fault yet it does make for a great meme.
So Mary Barra and General Motors are gong to overtake Tesla? How are they going to do that?
Her latest idea is for GM to becomes a technology company just like Tesla. To get into many different industries like battery storage.
Seems great on paper.
The GM Dilemma
There are a couple problems for General Motors with this plan. We will leave aside the fact that GM never operated as a technology company. It will be interesting to see how Wall Street takes this news over the next couple months. For years, they called Tesla "just a car company". I bet they fully embrace GM the technology company.
A big hindrance is the fact that GM still have not gotten batteries correct. Whereas Tesla not only has the 4680 they are producing, they also have other manufacturers producing them for them, GM has yet to successfully develop a battery. How are they going to get into the energy storage business without this?
The answer might appear to just buy them from those who produce batteries. There is one problem: these companies cannot keep up. Tesla is already on records as claiming they will buy every battery that is produced. The company, is once again, battery constrained.
Who do you think these manufacturers will side with? Tesla who is spending a small fortune with them already, and willing to do more, or GM who isn't even in the game/
The answer is clear.
Another problem that GM has is new markets means losing money. This is not exclusive to them, it is the nature of business. The problem here is their cash cow, sales of ICE vehicles, are on the decline. This could turn around but many are forecasting we are getting close to peak ICE sales.
The fact that GM is basically out of the EV game for now means they are completely dependent upon ICE. This might work in the near term, it is questionable as we enter the middle of this decade.
Therefore, we are going to see a revenue issue. When you are dealing with $280 billion, it is not a small gamble being taken here.
More Fluff
After seeing the nightmare that became Cruise and how the industry was misled on that, call me skeptical of GM's ability to be a technology company. There is a certain DNA these companies have and it is not resident in legacy automobile companies.
Tesla operates more like an Apple than a Ford. There is a completely different culture, mindset, and approach to things.
The fact that GM has made some many public mistakes has me wondering if this company is not just hanging on. Certainly the headwinds of the auto industry are a challenge. However, there could be more here.
We will see where things stand in the next couple years. It is very likely that Tesla will be a larger automotive company than GM by that point, and light years ahead of it in technology.
I wonder if Mary Barra really thinks she can beat Tesla or if it is more CEO gamesmanship?
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I don't like this decision of General Motors in trying to replicate Tesla they should replicate Toyota instead.
Tech companies(software) are eating the world :)
Andreeson was early with his prediction but it does seem to be the case.
Most companies are struggling internally. We are in late stage capitalism and at some point the system will break and these dinosaurs will die unless they can find something.