The Parallels of GM's Hummer EV and Tesla's Roadster

-
On October 20th, General Motor (GM) revealed the all-electric Hummer starting at $112K. A lot of the talk since then has focused on the hefty price tag and many articles were published on how GM is out of touch with reality because Tesla's Cyber Truck is much cheaper. I think all that talk misses the point that the Hummer EV could be a transformational moment for electric trucks, just as Tesla's Roadster was for electric cars when it launched in 2008. In retrospect, this could prove to be the moment EV trucks become mainstream. At launch, the Roadster was also priced well above $100K and it ignited the first real frenzy around electric vehicles - at least in Silicon Valley. The Hummer can be that for the rest of America.

At $112K, the Hummer EV may look like its targeted customers are Hollywood and/or literal royalty, but it can be a huge boon for electric trucks in general, at least from a marketing perspective. Hummer is an iconic and extremely popular brand, with a loyal fan base - and it's an off-road beast.

Tesla, Rivian, Ford and all the other electric truck makers should thank GM. The Hummer EV has the potential to transform the American love affair with the combustion pickup to an EV love affair. The secret, as Tesla has shown, is to make electric vehicles sexy and cool. The Hummer EV ticks these boxes.

Look beyond the price tag - I'm sure there will be cheaper versions of the Hummer EV. This is a big moment for EV trucks. None of the many other trucks (e.g. Nikola's Badger or Lordstown Endurance) would have been able to generate this much buzz.   

Disclaimer: This post is merely my own assessment and is not an investment recommendation. For professional advice, seek input from a licensed investment advisor.



 



 


Comments

Post a Comment

Popular posts from this blog

Bitcoin and the 99 other coins

-
So far Bitcoin is having a decent 2021. It hit a record high of more than $41.5K last week, continuing the upward trajectory it has been on since April of last year, when a single Bitcoin cost less than $5K. That rise now means that the sum of all Bitcoins in existence is worth more than $700B.  Because Bitcoin dominates much of the media's attention, it can be easy to forget just how many other cryptocurrencies there are. A quick look through the full list from coinmarketcap reveals over 100 alternative cryptocurrencies with a "market cap" of more than $100M. Each hoping that their unique take on the core blockchain technology will be enough to propel them out of obscurity, to where Bitcoin is today. With some of the names on the list you can't help but think someone is having a joke, or planning something nefarious - there is a "dogecoin", "YEP COIN", "OMG" and even "SushiSwap" (???). This time it's... different? Some of
Read more

Why the stock market is beating expectations

-
Image
  In the early stages of the pandemic, the S&P 500 index dropped a third of its value. Since then it has roared back, soaring more than 50 percent from its low in late March and setting an all-time high last week. This seems very implausible when set against the current state of the economy and the ongoing devastation caused by the pandemic. So why is the stock market rallying in the face of a pandemic and bad economic news? Several explanations are plausible. The stock market is not the economy: The stock market represents publicly traded companies only; it’s not the whole market. Most importantly, it’s always forward looking; i.e. it’s an indicator of the future earnings of those companies and how they would fare in the future. A rising stock market indicates that investors think these companies will do better in the future. On the other hand, a falling stock indicates that investors are pessimistic about the future earnings of companies. Continued income support for the econom
Read more

Netflix: No more burn?

-
In the last article on Netflix , I discussed why Netflix's promise to premiere a movie every week is not an overly ambitious strategy for the streaming giant. It's a brilliant move that isn't risky because Netflix can keep spending at this high rate for a long time. Yesterday's earnings call confirmed this. During the call, Netflix announced that it does not intend to raise any more capital, through debt or equity, as it plans to be cash-neutral this year and cash-flow positive beyond 2021. Looks like all those price increases are flowing through to the bottom line. Of course, saying you don't need any more capital is a really great way of getting people to offer you more capital at even more attractive rates (if you ever did want it).
Read more