10 Reasons Why Elon Musk Might Be Right About GM – TopSpeed

The battle between Tesla and General Motors is no secret, and it’s a classic conflict between an emerging power and a consolidated one: the newer one usually prevails, but it is not an exact science. The intervention of the government and other factors further complicate the situation. However, beyond the social media comments and debates, Elon Musk might be right about GM nearing a new bankruptcy. Of course, markets are unpredictable, and things can change in an instant. Still, in a world that’s moving toward exclusively electric cars, GM may have a challenging time adapting, not just because of its present situation but also because of its past.

In recent years, Elon Musk has been a vocal critic of General Motors and its reluctance to embrace EVs fully. Despite having significant resources, GM has been slow to pivot toward electric vehicles, and this could be a mistake. Musk’s predictions regarding GM’s future may seem bold and controversial, but they are not unfounded. GM’s history is replete with ups and downs, and if it doesn’t adapt to the changing market, it may well face another bankruptcy. While the future of the automotive industry is uncertain, one thing is clear: GM will need to adapt to survive.

Related: 10 EVs That Should Last More Than 300,000 Miles



10 The Year Toyota Conquered America

2024 Toyota Tacoma EV

Front and side view of a 2024 Toyota Tacoma EV

While the conflict between Tesla and GM takes center stage, other players are also making significant contributions. Toyota is one such player, and its sales figures in 2021 might indicate the beginning of GM’s decline in the North American automotive market. In 2021, Toyota sold 2.3 million vehicles in the United States, which represented a 10% increase compared to 2020. In contrast, the American automaker sold 2.2 million units, which was 114,000 vehicles less than the Japanese automaker and a 13% decrease in comparison to 2020. The semiconductor crisis partly contributed to this, which will be discussed later, but it marked an interesting turning point in the market. In 2022, GM regained its place, but by a slim margin, and the causes of its previous decline are far from being resolved.

9 GM Shares Are Down

White GMC Hummer EV

A white 2022 GMC Hummer EV in a desert

The financial markets are highly volatile, and to understand their information, one must not only focus on day-to-day details but also look at the big picture. In recent years, GM’s shares have seen a considerable decline, dropping from a peak of approximately $59 in May 2021 to just $32 in early April 2023. Of course, the decline has not been steady; there have been ups and downs, but the trend is clear and could be a real problem for the brand soon. The decline in GM’s stock price could be attributed to several factors, including the already-mentioned semiconductor crisis and the intense competition in the automotive market. GM’s slow response to these challenges and its lack of innovation in the EV segment may have caused investor confidence to erode, resulting in a fall in stock prices.

Related: Top 10 EVs With The Longest Range In 2023

8 GM, Tesla Is Coming For You

2019 Tesla Model 3 Hatchback
David Kiss | Topspeed

Rendering of a blue Tesla Model 3 Hatchback

Tesla’s plan to release a super affordable EV, which could cost less than $30,000 or even less than $25,000, could be a major threat to GM’s current dominance in the affordable electric car market. The Bolt EV and Bolt EUV models have been among the cheapest options, and have been selling in large numbers. Nevertheless, Tesla’s new car, known as the Tesla 2, could have the potential to divide the market and reduce GM’s sales. GM has plans to replace these models in the future, but the release of the Tesla 2 could still have a significant impact on GM’s sales shortly. GM’s long-standing success in the affordable electric car market may be threatened, and they will need to find new ways to compete with Tesla’s offerings.

7 Lack Of Chips: The Biggest Problem

Blue 2024 Chevrolet Silverado EV

Blue 2024 Chevrolet Silverado EV taking a curve at night

The ongoing semiconductor crisis has already been mentioned several times here. GM has been one of the automakers severely affected by the crisis, leading to production cuts and significant revenue losses. The shortage of chips has affected various models, including the popular Chevrolet Silverado and GMC Sierra pickups. In contrast, some automakers, such as Toyota, have managed to overcome the chip shortage more efficiently and increase their sales volume, as stated in the first paragraph. Even if GM has secured a deal to ensure a stable supply of chips in the future, the global outlook for semiconductor production remains uncertain. The automaker remains optimistic about its ability to navigate this crisis, but it is challenging to predict how long it will take to fully recover from the impact of the shortage.

Related: 10 Coolest EV Features Nobody Is Talking About

6 Bankruptcy: If It Happened Once, It Can Happen Again

Silver 2024 Chevrolet Corvette E-Ray

A front three-quarter shot of a silver Chevrolet Corvette E-Ray in action

GM’s previous bankruptcy in 2009 is a significant reminder of the company’s vulnerability in the face of economic crises. They were heavily indebted and were only able to recover with the help of the government’s anti-recession plans, which enabled it to deal with billions of dollars in debt. However, the situation now is not the same as it was then, and GM cannot rely on the same kind of support to get out of trouble or at least will not be able to do so forever. The company has undergone significant transformations since then, but the challenges they face today are different, and it must be able to adapt quickly to the changing market conditions if it wants to avoid a repeat of the not-so-distant past.

5 GM Wasn’t Born Electrified And Competition Is Wild

Blue Lucid Air Sapphire

Front view Lucid Air Sapphire on a salt flat

Despite being one of the largest and most important car companies in the world, GM is not a native company in terms of the electric car industry. As the world shifts towards EVs, GM faces tough competition from companies that were born as creators of those vehicles, such as Tesla, Rivian, Lucid, and many others. While GM has begun producing hybrid supercars, these new companies have taken the lead in terms of innovation and performance with fully electric models. Being a native electric car company means having an edge in terms of knowledge and experience in this area, which GM lacks. GM is indeed making strides to catch up with the competition, but it may still face challenges in becoming a major player in the electric car market. The fact that GM is killing the Bolt EV and EUV doesn’t help matters either.

Related: 10 Electric Cars So Good They Could Change Your Mind About EVs

4 Economic Dependence Can Be A Major Problem

2022 Chevrolet Bolt EV

A front three-quarter action shot of a Chevrolet Bolt EV driving

GM has undoubtedly benefited greatly from government support, not only concerning its 2009 bankruptcy but also in the years following. The recent attention from President Biden to GM’s electric vehicle efforts (e.g., naming GM and not Tesla when talking about the world of EVs) is a positive thing for the company in the short term, but it does raise questions about the long-term effects. Dependence on government aid can be a double-edged sword, as it may provide a necessary boost to a struggling brand, but it can also create a sense of entitlement and complacency that can be dangerous in the long run. Additionally, if political winds change and government support is no longer available, companies like GM that have grown accustomed to such assistance could be in serious trouble.

3 If You Suspend Advertising, You Can Get Into Trouble

2024 GMC Sierra EV front shot

Front shot of a white 2024 GMC Sierra EV

The acquisition of Twitter by Elon Musk has added an interesting twist to the ongoing competition between Tesla and GM. GM recently decided to suspend their advertising on Twitter temporarily, and it’s not hard to see why. With a competitor owning the platform where you pay for advertising, it’s understandable that GM would want to ensure that their strategies and data aren’t being used against them. However, reducing or stopping advertising is not something that GM can afford right now: advertising is the cornerstone of sales, and in a time of crisis and falling stock prices, having less visibility could be fatal. It remains to be seen what GM’s next move will be in this regard, but it’s clear that they need to find a way to continue promoting their products while navigating this unusual situation.

Related: 10 Most Common Problems With New Tesla EVs

2 Outside America, Other Competitors Await Their Turn

Fiat 500e parked

Fiat 500e parked with a wall and a dome in the background

Although North America remains one of the largest markets for electric cars, and protectionism in the country will remain a decisive factor, other countries and zones like China, Europe, and Japan are producing electric cars as well. Therefore, in the near future, GM could face unexpected competition from outside. Currently, some restrictions prevent obtaining tax benefits for purchasing electric cars that are not manufactured in the USA. However, other markets will continue to grow independently and could become huge without any restrictions, leaving companies like GM behind. Moreover, as more and more countries implement stricter emission standards, EVs will become more attractive, and the demand for these cars will increase, making the competition even more fierce. At the end of the film, only the strongest will be able to claim victory.

1 Too High Expectations Can Be Harmful


GMC Hummer EV SUV looking great in the sun set 

GM’s expectations of sales and profits may be too optimistic given the unpredictability of the EV market. It is interesting to note that GM has increased its profit forecast for this year due to increased sales and that they intend to become the largest electric vehicle producer, which is a lofty goal in a rapidly changing industry with many unpredictable factors, including new startups and technological revolutions. Having overly high expectations could be problematic if the semiconductor crisis worsens or other unexpected events occur. The world has proven to be an extremely unforeseeable place in recent years, and the electric vehicle industry is no exception. GM needs to be cautious and flexible about its projections and strategies to ensure its long-term success in this market, but they don’t seem to be moving in that direction.


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