Some equities lend themselves to frantic buying and selling, making them perfect for those looking to profit from short-term volatility. General Motors (NYSE:GM), on the other hand, is decidedly not one of these. A classic in the American automotive space, GM regularly delivers robust quarterly returns and is better suited for those investors who prefer a buy-and-hold strategy.
Of course, for investors who crave unpredictability and the potential for outsized returns, options like Tesla (NASDAQ:TSLA) or fledgling automakers like Lucid Group (NASDAQ:LCID) or Rivian Automotive (NASDAQ:RIVN) certainly exist. For a steady income stream, though, GM remains a solid choice.
Investors looking for less exposure to untested ideas, such as autonomous taxis or ‘robotaxis’, may find GM appealing. Contrastingly, Tesla, under its leadership, is significantly ramping up efforts in the robotaxis arena.
Tesla’s leader is purportedly sidelining plans to manufacture $25,000 electric vehicles (EVs) in favor of concentrating resources on the Robotaxi program. This move might be seen as either audacious or reckless, depending on one’s perspective on robotaxis. Unlike Tesla, GM is consciously tapering its capital allocation toward robotaxis.
“General Motors expects to reduce its spending on the automaker’s Cruise division by $1 billion in 2024.” Cruise is GM’s autonomous-driving division, which was acquired in 2016 and has been a loss-making venture for the company.
However, this doesn’t mean that GM is avoiding risk entirely and simply coasting on its existing product lines. GM continues to embrace innovation and venture into new territories.
A case in point is GM’s new product, launched under GM Energy, that enables power transfer between a home and an EV, and vice versa. Branded the “vehicle-to-home (V2H) bidirectional charging technology,” GM hopes this will be a solution for homes hit by power outages due to external circumstances.
The ‘V2H’ technology, which may eventually become a common feature, positions GM as a front-runner in its development and commercialization. In many respects, GM showcases the steady hand of a company that invests prudently, yet remains a bold innovator in several areas.
For investors who find V2H technology appealing but have reservations about robotaxis, GM makes a compelling alternative to Tesla.
Moreover, GM recently uplifted its dividend payout, a move not mirrored by Tesla or other automotive startups that typically do not offer dividends.
Therefore, those willing to look beyond the allure of quick gains should consider GM. With a long-term perspective spanning years, or even decades, investors can earn steady returns and dividends, which, if reinvested, can yield considerable long-term growth.
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