Possibly strongest argument for shorting GM

[101101]

TLDR:
Shared electric autonomy is projected to lead to a massive reduction in the number of vehicles on the road. This will translate into a massive reduction in revenue for GM, how will it be able to continue to finance itself with an addressable market %5-30% the size of its present market? Shared electric autonomy in the air (see Lilium) is also a possibly an even more disruptive potential- seems Tesla has taken not of this too.
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Now lets say we don't believe that GM is run by illuminist or at least that it has the right management now. Lets also say that we don't believe that GM has a proverbial hook in its rear end from petrol or that it can at least get free of it in time. Lets also say that we are aware that GM had supposed record sales at the end of 2016 supposedly attributed to the Chinese market. And lets say that the 20 billion that GM did in stock by back wasn't just to make it look like the market wasn't foreclosing on it in the face of its record year over Tesla (I thought the response to the buy-back was a 3% decline- double checked and it appears I was also at least partly wrong because there was a subsequent spike in GM's stock price) Lets say all this holds. Lets even say that GM is doing ok in self-driving cars- which I doubt and suspect they will lean on Waymo. Lets suppose all of that.

Even if we can say all this, there is something Tony Seba used to bring up a lot but has toned down ,possibly because it's probably to gut wrenching for audiences to handle, and that is that electric sharing autonomy is expected to reduce the number of cars on the road by 18x rather quickly by say 2025 or 2030. Nothing he has said lately reverses that expectation and he was thorough in breaking that expectation down against every obvious trend including population growth.

Now how would that impact GM? 18x less revenue? 18x less employees? 18x less factories? What does 18x less cars mean for GM? That they go from selling 10 million cars a year to 550K? Actually I am starting to remember a more recent presentation, where the numbers Seba presented have a more gentle slope. But lets be very charitable and say only 20 percent of cars will remain. How does GM survive on 20% of its current revenue- and this is assuming GM can hold its own in the coming decade? Maybe those cars are somehow more expensive to help prop up GM's revenue? Maybe, but they would also likely be more like commodity units canceling some of that increase in unit price and revenue- Toyota has expressed this concern that the product will be expensive (retool) less profitable because its harder to differentiate in a commodity environment and not a fun business to be in as a result. So to be generous lets say that is 30% of its present revenue that GM would have to survive on. And this is if it can manage to hold on to its revenue and out compete new comers that don't have its baggage as it down sizes and cannibalizes its current organization- compete against Tesla and Chinese competitors that can take share without these disadvantages or having to deal with real sunk cost and investment in obsolete tech and plant property, without having to cannibalize themselves. Where is the room for GM's famous profit first focus in this? Surely it will try to hide behind jobs just like it blamed unions for its bankruptcy in the recent past?

And now the kicker, this is precisely why despite selling literally 100x more cars and doing a $20 billion dollar stock buy back the market has been valuing Tesla higher than GM as of late- well that and its history of failing convincingly on EV and solvency problems etc and blaming its bankruptcy in the middle of a pro petrol regime on its unions/workers. Its dishonesty in the media should be counted too. Another measure where GM really tips its hand is where it put out an actual stat on its expected autonomy cost per mile and it was just under $1.00 a mile on electric autonomy in 2030 whereas Tesla was saying its Tesla network would be at $.60 per mile in 2018-19 if memory serves. This makes Tesla look likes its well over a decade ahead of GM. Think about GMs tactics in trying to keep Tesla out of Detroit, was it part of the lobby that tried to prevent Tesla from making full use of its credits? It still hasn't learned to be honest and open and play fair, seems it doesn't think it survive it it does.

I can see one way for GM to survive. Its to go full electric in everything essentially attempting to copy Tesla. It can copy Lilium and go with electric aviation, and do electric barges, and electric storage and electric charge stations and solar cell. But to do that it would have to get that petrol hook out of its arse right down to the make up of its board. It also has to become a more open and honest company and start to understand that profit and rich parasites are last not first a distraction not a priority, probably has to change its management first culture as well. A couple good gestures would be moving the head-quarters and re-naming the company to something electric friendly. Needs to drop its scams i.e., hybrids (hybrids were important in the past) and hydrogen and conflation of hybrids and hydrogen with electrification- it should cut all its ties with the petrol industry outside of plastics and chemicals and get into fully green powered plants and zero waste. Stop using the shills in media. If its got something to say let it say it through un-sponsored publications with people with a reputation for honesty and non bias. No more phony studies.

 

[WadeTyhon]

TLDR:
Shared electric autonomy is projected to lead to a massive reduction in the number of vehicles on the road. This will translate into a massive reduction in revenue for GM, how will it be able to continue to finance itself with an addressable market %5-30% the size of its present market? Shared electric autonomy in the air (see Lilium) is also a possibly an even more disruptive potential- seems Tesla has taken not of this too.
-----
Now lets say we don't believe that GM is run by illuminist or at least that it has the right management now. Lets also say that we don't believe that GM has a proverbial hook in its rear end from petrol or that it can at least get free of it in time. Lets also say that we are aware that GM had supposed record sales at the end of 2016 supposedly attributed to the Chinese market. And lets say that the 20 billion that GM did in stock by back wasn't just to make it look like the market wasn't foreclosing on it in the face of its record year over Tesla (I thought the response to the buy-back was a 3% decline- double checked and it appears I was also at least partly wrong because there was a subsequent spike in GM's stock price) Lets say all this holds. Lets even say that GM is doing ok in self-driving cars- which I doubt and suspect they will lean on Waymo. Lets suppose all of that.

Even if we can say all this, there is something Tony Seba used to bring up a lot but has toned down ,possibly because it's probably to gut wrenching for audiences to handle, and that is that electric sharing autonomy is expected to reduce the number of cars on the road by 18x rather quickly by say 2025 or 2030. Nothing he has said lately reverses that expectation and he was thorough in breaking that expectation down against every obvious trend including population growth.

Now how would that impact GM? 18x less revenue? 18x less employees? 18x less factories? What does 18x less cars mean for GM? That they go from selling 10 million cars a year to 550K? Actually I am starting to remember a more recent presentation, where the numbers Seba presented have a more gentle slope. But lets be very charitable and say only 20 percent of cars will remain. How does GM survive on 20% of its current revenue- and this is assuming GM can hold its own in the coming decade? Maybe those cars are somehow more expensive to help prop up GM's revenue? Maybe, but they would also likely be more like commodity units canceling some of that increase in unit price and revenue- Toyota has expressed this concern that the product will be expensive (retool) less profitable because its harder to differentiate in a commodity environment and not a fun business to be in as a result. So to be generous lets say that is 30% of its present revenue that GM would have to survive on. And this is if it can manage to hold on to its revenue and out compete new comers that don't have its baggage as it down sizes and cannibalizes its current organization- compete against Tesla and Chinese competitors that can take share without these disadvantages or having to deal with real sunk cost and investment in obsolete tech and plant property, without having to cannibalize themselves. Where is the room for GM's famous profit first focus in this? Surely it will try to hide behind jobs just like it blamed unions for its bankruptcy in the recent past?

And now the kicker, this is precisely why despite selling literally 100x more cars and doing a $20 billion dollar stock buy back the market has been valuing Tesla higher than GM as of late- well that and its history of failing convincingly on EV and solvency problems etc and blaming its bankruptcy in the middle of a pro petrol regime on its unions/workers. Its dishonesty in the media should be counted too. Another measure where GM really tips its hand is where it put out an actual stat on its expected autonomy cost per mile and it was just under $1.00 a mile on electric autonomy in 2030 whereas Tesla was saying its Tesla network would be at $.60 per mile in 2018-19 if memory serves. This makes Tesla look likes its well over a decade ahead of GM. Think about GMs tactics in trying to keep Tesla out of Detroit, was it part of the lobby that tried to prevent Tesla from making full use of its credits? It still hasn't learned to be honest and open and play fair, seems it doesn't think it survive it it does.

I can see one way for GM to survive. Its to go full electric in everything essentially attempting to copy Tesla. It can copy Lilium and go with electric aviation, and do electric barges, and electric storage and electric charge stations and solar cell. But to do that it would have to get that petrol hook out of its arse right down to the make up of its board. It also has to become a more open and honest company and start to understand that profit and rich parasites are last not first a distraction not a priority, probably has to change its management first culture as well. A couple good gestures would be moving the head-quarters and re-naming the company to something electric friendly. Needs to drop its scams i.e., hybrids (hybrids were important in the past) and hydrogen and conflation of hybrids and hydrogen with electrification- it should cut all its ties with the petrol industry outside of plastics and chemicals and get into fully green powered plants and zero waste. Stop using the shills in media. If its got something to say let it say it through un-sponsored publications with people with a reputation for honesty and non bias. No more phony studies.

"General Motors is preparing to take on Uber, Lyft and other ride-hailing companies with its own self-driving ride-hailing service by 2019..."
https://www.cnbc.com/2017/11/30/gm-...-services-with-self-driving-cars-by-2019.html

"GM executives told investors here Thursday that by 2025, autonomous vehicles could be operated profitably because cost reductions and wide consumer adoption should reduce the price of such transportation down to less than $1 per mile, or about a third of current ride-hailing services.

Without a driver to pay, profits from autonomous ride-hailing fleets would go directly to whatever companies run them. The main cost of business is maintenance and manufacturing the vehicles."
https://www.freep.com/story/money/c...cars-can-affordable-and-profitable/910608001/

"Today, GM (GM) makes about $30,000 over the lifetime of every vehicle it sells, GM president Don Ammann said. But selling rides in driverless cars could mean that figure balloons to hundreds of thousands of dollars per car.

The profits per car could be big because electric cars will eventually cost less to make and, since they don't use gasoline, cost less to run. And since they're autonomous, GM won't have to pay drivers. All of these factors should bring down the cost enough to make the service much more attractive to customers than today's ride-sharing services."
http://money.cnn.com/2017/11/30/technology/gm-autonomous-cars-2019/index.html

 

[Pushmi-Pullyu]

[Quoting Money.CNN.com] "Today, GM (GM) makes about $30,000 over the lifetime of every vehicle it sells, GM president Don Ammann said. But selling rides in driverless cars could mean that figure balloons to hundreds of thousands of dollars per car."

Is it just me, or does this read very much like wishful thinking? If the profit margin is that huge, then it will attract many players to that market, and soon competition will bring the profit margin down much closer to what's normal in business.

How could it be otherwise?

 

[WadeTyhon]

Is it just me, or does this read very much like wishful thinking? If the profit margin is that huge, then it will attract many players to that market, and soon competition will bring the profit margin down much closer to what's normal in business.

How could it be otherwise?

Personally I think there is a limited market for autonomous ride sharing. Demand wouldn't be high enough in the US at least. I do not anticipate a world like this ever materializing: "Shared electric autonomy is projected to lead to a massive reduction in the number of vehicles on the road. This will translate into a massive reduction in revenue for GM, how will it be able to continue to finance itself with an addressable market %5-30% the size of its present market?"

I think the main idea is that until this technology rolls out into the mainstream, development of this new tech can be funded by this type of ride sharing app.

Right now, GM sells a car only once. But for these autonomous vehicles, they earn money continuously over the life of the vehicle. And they can potentially be more profitable than Uber or Lyft since they build their own vehicles, maintain their own fleet, own the self-driving tech via Cruise, don't need to pay drivers, and own their own ride sharing platform.

But I don't think GM expects autonomous ride sharing to be their only income. Certainly not anytime soon. In major cities demand should be higher. But for far out suburbs/exurbs or rural areas, I doubt this would ever be viable or desired.

I like driving. I live in a city. I have access to light rail, buses, ubers, taxis etc. But I only actually utilize these other transportation options for maybe 5% of my travel around town. Similar to Lyft or Uber, I think most people will continue to own their own vehicles and choose to also hail a ride when the need arises.

If autonomy can bring the prices down, and GM can increase the demand for these ride hailing services and operate them profitably then that is great! But demand will always be limited for this application. The high profits from these ride hailing apps will help recoup the cost of the development of the technology before it begins expanding into the other vehicles they sell.

That's just the way I see it playing out though.

 

[Pushmi-Pullyu]

Personally I think there is a limited market for autonomous ride sharing.

I do, too. As I've said in previous comments, the idea of privately owned cars being offered for use on a ride-sharing service seems similar to Airbnb, which is a service in which people rent out rooms in their house as a bed-and-breakfast, or just as a sleeping room. Now, I've read that Airbnb has grow to such a size that its business exceeds any individual hotel chain in volume, but as compared to the hotel industry in toto it's minuscule in size.

Having your own car ready for your own use at any time, including any emergency needs, is a convenience that many, many people are willing to pay a lot of money for. It seems very strange to me that people think this is somehow going to change when fully self-driving cars become available.

As I see it, the only real change this will have is that taxi service will become cheaper. That doesn't mean it will become any more convenient, or that it will somehow remove the need for a large percentage of the total U.S. population to have their own car to commute to work every day.

Ride-sharing on a widespread basis might make more sense in Europe, where many people use mass transit to commute to work, and only drive their car on weekends.

But I don't think GM expects autonomous ride sharing to be their only income. Certainly not anytime soon. In major cities demand should be higher. But for far out suburbs/exurbs or rural areas, I doubt this would ever be viable or desired.

Right! That's the point, or at least one of the main points here: Depending on ride sharing for all transportation needs, so that someone who now owns a car can get rid of it, would be (mostly) only practical inside major cities, which are already well served by taxi services. Again, the only real change here is that taxi service will become cheaper. Are there really that many people who would voluntarily get rid of their cars if the price of taxi fares dropped suddenly?

I could be wrong, but I just don't see that happening.

And as you say, for those living in the suburbs and rural areas, it's not viable at all, period.

 

[WadeTyhon]

I do, too. As I've said in previous comments, the idea of privately owned cars being offered for use on a ride-sharing service seems similar to Airbnb, which is a service in which people rent out rooms in their house as a bed-and-breakfast, or just as a sleeping room. Now, I've read that Airbnb has grow to such a size that its business exceeds any individual hotel chain in volume, but as compared to the hotel industry in toto it's minuscule in size.

Having your own car ready for your own use at any time, including any emergency needs, is a convenience that many, many people are willing to pay a lot of money for. It seems very strange to me that people think this is somehow going to change when fully self-driving cars become available.

As I see it, the only real change this will have is that taxi service will become cheaper. That doesn't mean it will become any more convenient, or that it will somehow remove the need for a large percentage of the total U.S. population to have their own car to commute to work every day.

Ride-sharing on a widespread basis might make more sense in Europe, where many people use mass transit to commute to work, and only drive their car on weekends.



Right! That's the point, or at least one of the main points here: Depending on ride sharing for all transportation needs, so that someone who now owns a car can get rid of it, would be (mostly) only practical inside major cities, which are already well served by taxi services. Again, the only real change here is that taxi service will become cheaper. Are there really that many people who would voluntarily get rid of their cars if the price of taxi fares dropped suddenly?

I could be wrong, but I just don't see that happening.

And as you say, for those living in the suburbs and rural areas, it's not viable at all, period.

Yeah I agree. And as the costs of the hardware drops and software improves, I think it will trickle down as an option in the vehicles any one of us can drive.

Just recently saw an interview with Dan Ammann on MSNBC:



I'd say key points from the interview were "No new infrastructure needed", "Safety is priority", "Make people comfortable with the technology", "New revenue stream", "Making ride hailing cheaper and more profitable"

And most importantly, when he is asked "I like driving... When do you think I will not be driving anymore?" Ammann responds/clarifies the statement as "We want you to have the option to not drive yourself anymore." Steering wheels and car ownership is here to stay for a long time.

 

[101101]

Personally I agree with much of the analysis above and its part of why I like Tesla Network as a concept better so far.
Pushing the taxi model to far makes it like riding in a public toilet, you'd need the wax sheets. I get that.

But what Tony Seba is saying, in the other format he uses, is that what US consumers in particular and consumers in a lot of other parts of the world will pay on ICE, petrol fuel/energy will drop by 10x leaving US consumers with an extra $6000-6500 per year windfall, which sounds conservative because he has tended to say US consumers pay $10K per year on average and will soon pay $1K per year on average and this by 2022 or 2025.

For GM to remain the same it would have to write off its sunk cost in petrol and find 10x more marker share all of it from among the new BEV space per Tony because that is all that will exist and they won't be able to hold guns to people's heads and make buy ICE.
For Tesla to continue to expand may need to take share but it won't be that kind of uphill climb. And realistically or at least very likely all GM is interested in is holding BEV below 15% by 2030 no way in hell that ever happens in the US short of the installation of a total idiot dictatorship following a loss by the people in a civil war.

Just look the PR around Tesla. Tesla is last, or Tesla can't compete because of no Lidar- both incredibly stupid claims. Equally stupid- guy with under influence or asleep claims he hit something with auto pilot on so auto pilot is bad. What is happening there is the corrupt insurance industry that takes our money and pisses it away gambling on the stock market keeping gains for itself and passing along the losses sees its casino scam failing and lying like crazy in the media to try to slow down the inevitable. These things always coincide with impending short loses and threats to keeping petrol shill GM slightly ahead in market cap. Last time was with a ex seal or special forces member and a decap almost like the ISIS stuff- see the MO on this PR? Another incredibly stupid lie is: Tesla is having invalids in 3rd world sweat shops construct Model 3 battery units from raw ore with hand tools. The critics are terminally dumb, the shorters will probably lose 100 billion or more before they give up on losing to Tesla on shorts- there losses will start to be announced with Tesla stock stories. To bet against Tesla you are betting against the survival of humanity and against innovation while betting for and on the side of money and heredity based corruption and co-optation, its the supidest kind of conservative that best against Tesla. Go ahead keep losing money wishing vision-less fools will win. Obama after lopping the CEO off GM should have told it, the massive lone was completely contingent on transitioning to pure BEVs by 2020 and that failure would cause default and liquidation of company.

 

[WadeTyhon]

Personally I agree with much of the analysis above and its part of why I like Tesla Network as a concept better so far.
Pushing the taxi model to far makes it like riding in a public toilet, you'd need the wax sheets. I get that.

The general public will treat a taxi or a rental car like crap. This will happen with Cruise and the Tesla Network.

And some people hate public or shared transportation period. These people will not use Cruise or the Tesla Network.

But if you're a person who is already comfortable using taxis, bus and rail services, you won't have a problem using an autonomous Bolt or renting a Model 3.

I have no intention of ever using the Tesla Network to lend out our future Model 3. It will by my car and I don't want a bunch of jerks trashing it! I don't want anyone to treat my beautiful new car the way they treated David Murray's Fiat! https://insideevs.com/firsthand-account-renting-ev-turo/

Tesla is last, or Tesla can't compete because of no Lidar- both incredibly stupid claims.

Unfortunately, this is the one area Tesla has fallen behind. They have made no demonstration that they have a fully autonomous vehicle developed using the Lidar-less hardware of a Model 3. Heck, Tesla was a year behind schedule just getting autopilot back to previous levels.

GM and Waymo are launching public platforms in about a year. If Tesla can do the same, they will prove all the naysayers wrong.

It's possible they can pull it off and I hope they do because it would make this tech even more affordable. But they have been awfully quiet lately on the full autonomy front. I don't think it's gonna happen anytime soon.

 

[101101]

I think Google (Waymo) and Tesla are the only companies that have demonstrated real stuff. GM's stuff is pure vapor ware, and its dance on autonomous vehicles makes the point in typical GM incredibly dishonest fashion. I don't think it got anything for Cruz or that its even viable.
I think the reality of what is happening is it thinks it can lean on Google (especially after the Ford deal fell through) but I think GM will find Google incredibly dismissive of GM and its history and what it stands for meaning Google will get full credit regardless of any bribing GM attempts to continue to try to cover for its lack of credibility in the autonomous space. So in essences GM's main plan is to try to suck Googles' tit. GM's Lyft did just pick up a Tesla execs.

 

[WadeTyhon]

I think Google (Waymo) and Tesla are the only companies that have demonstrated real stuff. GM's stuff is pure vapor ware, and its dance on autonomous vehicles makes the point in typical GM incredibly dishonest fashion. I don't think it got anything for Cruz or that its even viable.
I think the reality of what is happening is it thinks it can lean on Google (especially after the Ford deal fell through) but I think GM will find Google incredibly dismissive of GM and its history and what it stands for meaning Google will get full credit regardless of any bribing GM attempts to continue to try to cover for its lack of credibility in the autonomous space. So in essences GM's main plan is to try to suck Googles' tit. GM's Lyft did just pick up a Tesla execs.

Welcome back! How are things in your alternate reality?

What exactly do you think Tesla has demonstrated recently? Please show me.

What do you mean GM has shown vaporware? Hundreds of autonomous Cruise vehicles have driven on real roads. Including over 100 Bolt EVs driving right now.

What do you mean GM can “lean on google(alphabet/waymo)?” Cruise and GM are competing with Waymo on autonomy not partnering with it.

“So inessences GM's main plan is to try to suck Googles' tit”

Bullcrap. GM already invested in Cruise. They had a working self driving platform years ago. They don’t need Waymo.

“GMs Lyft” did not just “pickup a Tesla exec.” Lyft is not GMs company. Google and GM both invest in Lyft. As do dozens of other investors and corporations. Google owns more of Lyft than GM.

And that Tesla exec that joined Lyft was McNeil - the head of Sales and Service at Tesla. So I don’t see the relevance.

I would love to see Tesla make progress on FSD. But they have made none recently.

Guess what: It is Ok if Tesla isn’t a leader at everything. Let them focus on the Model 3! It is far more important than autonomous drive right now.

Anywhoo... I only respond to you for the benefit of others. Your alternative facts don’t need to spread further than this forum!