Andrei Jikh
My reaction to Tesla’s new competitor – the GM Supertruck. What does this mean for their stocks?
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Ford and GM are the two oldest car companies in the world dating back to 1903 and 1908 and yet – Tesla’s stock market cap is worth more than both of them combined a couple times over.
GM is investing $2.2 billion dollars into creating 20 new electric cars by 2023. And GM, specifically the Hummer has a massive customer base because of how long they’ve been around as well as the off-roading capabilities that they’re known for. Tesla and the cyber truck has yet to prove that. In just one hour, GM filled all their preorders on the limited edition supertruck.
Despite this, Tesla’s infrastructure with it’s factories and superchargers around the world is at least 2-3 years ahead of everyone in the EV game. Looking at the specs the fastest Hummer EV will go 0 to 60 in 3 seconds, while the tri-motor Tesla Cybertruck will get there a tenth of a second quicker. They both have autonomous driving and GM has what’s called Supercruise. The cyber truck is going to have a 6.5 foot bed versus the GMCs 5ft bed. Big difference.
As far as the most important metric, the range of the hummer is topped out at 350 miles, meanwhile the cyber truck will top out at 500 miles, that is a massive difference in range. Tesla’s cybertruck (tri motor) will cost $77,900 fully maxed out and the Hummer will be $112,595. That may not sound like much, but that’s a difference of $34,696: which means you can have a maxed out Cybertruck plus a base Model 3 for the same price of GM’s Hummer.
As far as which stock is better to invest in, Tesla or GM? Long story short, GM is highly undervalued at the current moment with a fair value target of $50 per share which it’s currently trading way below that. That’s because GM is not very popular, they’re not a tech company, they’ve gone through a major bankruptcy and investors are very slow to trust it but by the numbers, their stock is worth less than what it’s currently operating at in terms of profitability.
For Tesla, the estimated fair price target to be $319 a share so hugely overvalued from where it’s at right now. Which is not to say don’t invest in Tesla. All this means is that people are placing a premium on Tesla stock because they think Tesla’s future will be even more profitable than where it is right now. We’re in uncharted territory, on one hand GM is building infrastructure that won’t start paying “dividends” until ten years from now, but on the other hand, we have Tesla which at this point is a tech company which has no choice but to succeed to justify it’s current price.
*None of this is meant to be construed as investment advice, it’s for entertainment purposes only. Links above include affiliate commission or referrals. I’m part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future. .