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Can General Motors Become an Electric Vehicle Leader?

By Matthew Frankel, CFP® and Brian Withers – Aug 4, 2021 at 6:37AM

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Could this legacy automaker pivot into the next generation of transportation?

General Motors (GM 0.87%) is often thought of as a "legacy" automaker, but the reality is that the company is making some big moves in the electric vehicle and autonomous transportation industries. In this Fool Live video segment, recorded on July 16, contributors Matt Frankel, CFP, and Brian Withers, along with chief growth officer Anand Chokkavelu, discuss whether General Motors could eventually become one of the leaders in the EV space.

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Matt Frankel: I just think people discount how successful they are going to be at the EV game. There's such brand loyalty among those legacy automakers that's going to translate into big profits.

Anand Chokkavelu: I think we've talked about this before, but for me, like just the EV space in general. I just can't-- I think EV space great as an industry. What I can't figure out is how the dynamics of that with current players and future players, how that pie is split up, what the final profit margins are, and any optionality on it. So it's a tough one for me to gauge given valuations.

Brian Withers: I don't know. Thinking about a company that's going from manufacturing internal combustion engines and know what has to go into a factory that makes those kinds of things, and then moving the whole supply chain and the factories and retrofitting them to make electric cars should not be underestimated in any stretch the imagination. I think the companies like General Motors and Ford (F 0.36%) have been doing this and they've been refreshing factories. They are very much known for their manufacturing prowess, but that transition is going to be hard and long and expensive.

Frankel: I would argue that next to Tesla (TSLA -0.19%), GM has been the most successful EV company to date. They were the first company to bring in a mass-market EV. The EV1 was in 1993. I would argue that no electric car has been more transformative than the Bolt. That was the first I think electric car that would go over like 50 miles without being plugged in or putting gas in or anything like that. The Bolt is at its price point was a game changer. That's still out today. They've already had success and they are developing their own proprietary battery technology, the Ultium battery platform is showing real signs of promise. That's what's powering the Hummer EV that comes out later this year. They're making the transition quicker than you might expect. This is why I am GM and not Ford. I just think they are doing a better job at that transition you were talking about. Which is not going to be cheap.

Withers: They suck at marketing then.

Frankel: They have Factory Zero, that's their new EV focused factory. They redid their logo to be more like EV-ish.

Withers: They just need an Elon Musk tweet person. If Mary Barra just starts to get on Twitter, maybe that'll help.

Frankel: She prefers to be quiet and produce results.

Matthew Frankel, CFP owns shares of General Motors. The Motley Fool owns shares of and recommends Tesla and Twitter. The Motley Fool has a disclosure policy.

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