Dividends and GM charts green road map, with plan to build only zero-emission vehicles by 2035

In the 1960’s a senior executive of GM testifying before the Senate said to the effect As GM goes so does the US economy. For many years, that has essentially true because GM had a 40% market share. 5 different brands for each income tax bracket, their cars were leaders in style, performance and the public loved driving them. Then the public changed in the 70’s and 80’s and started buying smaller cars which GM did not want to build – they gave the market to Japanese and German automakers and GM has been trying to get back to the top of the mountain ever since.

Over the past couple of years, people have loved what Tesla is doing particularly investors who give high valuations to the Tesla stock. The other vehicle companies would love to have the valuation Tesla has and with a new President in office with a Green Deal, GM has changed to match the President.

In an article by Jeffery Jones and Eric Atkins, GM’s chief executive officer Mary Barra said GM will spend $27 billion over the next 5 years to be able to offer emission free light duty vehicles across its price ranges. GM will move towards the gradual phasing out of the gas internal combustion engines it has built for 113 years. The company employs more than 160,000 people.

The goal is to sell 30 electric vehicles in global markets and 40% of its US product line powered by batteries by the middle of this decade.

There will be a number of issues going forward – electric vehicles have fewer parts than internal combustion engines or fewer people in the plant will be required. There are different sources of materials in the electric vehicle, battery life and how far can one go before recharging is the issue. If it is about what you do in the internal combustion engine, people have to go to the gas station or recharging station, perception is important, then there maybe no real changes for driving habits. Tesla cars have a great deal of software attached to them, similar to the way Microsoft or Apple sends updates to your computer, Telsa sends updates to their cars. The vehicle’s software is important aspect of the car experience.

Linking to dividend paying stocks, if you look at a list of top market capitalized stocks over the years, the names tend to change. Sometimes the change is gradual, sometimes it is seemingly rapid when new industries come forward, there is change in the marketplace. How management deals with the change is one of the things as an investor you have to evaluate. If you like how they adapt, then holding the stock can be a very good thing, otherwise look at alternatives.

There are more questions than answers, till the next time – to raising questions.

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