The Incredible Shrinking General Motors

**313WX** · March-10-19, 01:53 PM

It should be noted, that individual isn't the only one to call GM's bluff. The below article jives with much of that individual is saying. This was posted before, but I will post again

https://seekingalpha.com/article/422...vehicle-bubble

In light of the recent layouts, there is $1.5 billion of reduced capex that the company will be saving by cutting the low-demand production lines and the anticipated plant closures [[a drop in the bucket compared to the annual capex of $27.5 billion), however, the $1.5 billion capex is not being reinvested into electric vehicles or autonomous vehicle production at this time. The lack of reallocation conflicts with statements from the company CEO, Mary Barra, who promised the company would double investment in electric vehicles and self-driving technology during this week’s announcement.

The bottom line is that GM is correct to prepare for tough times, but they are not disclosing the true timeline for long-range electric vehicle and autonomous vehicle deployment.

Three Words to Heed for GM Stock: Gartner’s “Trough of Disillusionment”
In September, Autonomous Vehicles fell into the “trough of disillusionment,” which is the downward slope published by the analyst firm, Gartner, to show the hype cycle for certain technologies. You can think of this as “winter is coming” for tech products – a time when all of the buzz and excitement finally meets reality [[note: artificial intelligence winter is a well-documented thing).

ABI Research, an advisory firm that reports on market-foresight trends, predicts 8 million consumer vehicles with Level 3 to Level 5 autonomy will ship in 2025. Compare this to the 94.5 million vehicles sold in 2017 - which equates to 8.5% of sales. This is a small and fairly insignificant percentage of market share to be chasing 7-years ahead of deployment. Yet, investors have poured cash into auto manufacturers due to marketing campaigns that provide false hope for the near future.

The reality for autonomous vehicles includes regulations, production cycles, and delays in implementation for what is an extraordinarily difficult problem to solve – how to get machines to respond like humans at crucial moments. This gap between investor expectations [[perception) and commercial deployments [[reality) has created an autonomous vehicle bubble.

Per statements from GM, long-range electric vehicles are a minimum of 8 years before they represent a slim 10% of GM’s current production. In 2017, the company committed to a volume production goal of “1 million units globally by 2026,” with the majority of EVs being sold in China. GM’s overall production was about 10 million units globally in 2016.