Tesla's meteoric rise over the last couple of years has disconnected the company's share price from its fundamental value, in my view. Consider that Tesla is still a barely profitable company whose market capitalization exceeds all other major US, European, and Japanese auto companies combined. What's more, Tesla's sales are just 1/50th of the other major automakers.
Enter General Motors (GM), which announced late last week they were setting a goal of 2035 for phasing out gasoline- and diesel-powered vehicles, which is a huge deal for GM -- vehicles that run on fossil fuels make up approximately 98% of GM's total sales. The announcement is a monumental shift in the company's long-term strategy, and sets it up to compete with Tesla in the decades to come.
The available market share for EV sales is still very much up for grabs -- about 2.2 million EVs were sold globally in 2020, which made up a mere 3% of overall auto sales. Imagine a time when 50% of all auto sales are EVs! Who will be selling the most vehicles then?
GM's decision comes at a time when the market is pushing corporations towards climate-friendly policies and emissions-conscious production. GM took a big step last week in saying it wants to be a long-term player.
So which stock does Tickeron's A.I. like the most now? Below, A.I.dvisor runs analytics on both stocks side by side, with actionable trade ideas.