'Told Them So:' Elon Musk Mocks Big-Ticket Investor Who Chose Cruise Over Tesla After GM's Self-Driving Unit Plans $1B Expense Cut
Portfolio Pulse from Anan Ashraf
General Motors Co (NYSE:GM) plans to cut $1 billion in expenses at its self-driving unit Cruise in 2024 after reporting a $3.48 billion operating loss in 2023. GM CEO Mary Barra reaffirmed commitment to Cruise, considering both internal and external funding for its relaunch. Tesla CEO Elon Musk mocked investors, including T. Rowe Price, for choosing Cruise over Tesla, referencing T. Rowe Price's 2019 investment in Cruise after reducing its Tesla stake. Cruise faces safety concerns and investigations by the DOJ and SEC after an accident.
January 31, 2024 | 11:19 am
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NEGATIVE IMPACT
GM announced a significant expense cut at its Cruise division and is facing regulatory scrutiny following an accident. The company remains committed to the technology.
The announcement of expense cuts and ongoing losses at Cruise, combined with regulatory investigations, could negatively impact GM's stock in the short term due to investor concerns over profitability and safety issues.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100
NEUTRAL IMPACT
Elon Musk's comments mocking investors for choosing Cruise over Tesla highlight the competitive landscape in the EV and autonomous vehicle market.
While Musk's comments may reinforce Tesla's competitive position, they are unlikely to have a direct short-term impact on Tesla's stock price. The focus remains on GM's Cruise issues rather than Tesla's performance.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50