General Motors To Move Into a Shared Auto Mobility

The auto-maker might be the most disruptive automaker in the industry.

Markets all over the world are going to a rapid and drastic change especially the automobile industry. Amid this technological advancement, auto-mobile companies do not want to be left behind and enjoy every chunk of these changes. Furthermore, auto-makers all over the world are working on establishing ways to make the driving environment more safe and clean and one of the solutions that they have come up with is Shared Auto Mobility.

General Motors Company has made numerous attempts to enter into the Shared Mobility space in recent time which makes us believe that it might just be the most sustainable auto-maker in the industry for the specific technology.

Mobility Services will not only reduce the heavy traffic congestion problems but also help managed the transport systems which are likely to be used as a shared service, since the population of the world is growing at a good 1.2% rate. Furthermore, analysts are concluding that in the recent future, people will avoid buying their own vehicles and rather prefer more economic ways of commuting which could include car sharing services or even public transport – that ought to reduce the congestion and transportation problems.

Numerous analysts in the industry believe that there is likely to be a drastic change in the vehicle purchasing patterns of people in the upcoming years. Last year, analysts Barclays shared their views on the future of the automaker industry in a report. As per the report by the investment bank, car ownership is likely to call by 50% in the next 35 years as they will prefer to commute via shared autonomous vehicles that are currently in the making. Every shared autonomous car is expected to replace nine traditional vehicles that are now owned by customers. This change would bring the auto demand to 9.5 million which will indicate a drop of 40%, in the United States.

Making such a concept a reality entirely depends upon automakers making technology their friend; as these automobile companies will need to partner up with technology companies to bring new features and technologies to their cars. Taking into consideration the fact that research is the first step in achieving all these goals, the research and development expenses of General Motors Company went up to $7.5 billion in 2015 to an initial $7.4 billion in 2014.

GM is not the only auto-maker that has injected a lot of cash into R&D; many others have made hefty investments in this research as well however GM is largest car seller in North America and has made the most investment in the car mobility field taking the lead in the specific research.

Tesla's Fourth Quarter Guidance

The auto making giant's guidance for the fourth quarter shows a lot of positives for the investors to look forward to

Tesla Motors witnessed a much needed high on the index right after it announced its third quarter earnings results, which turned out to be very positive for not only the investors but also for the analysts who thought the company will not be able to deliver a bullish quarter. The earnings call did not only hear the giant informing the market of its earnings, but the management also suggested a great guidance report for the upcoming quarter which turned out to be a big green signal for the investors to begin with their investments in the company without thinking twice. This positive guidance also raised the share price by a 10% after the call and the giant also informed the industry about some of its future plans for the analysts to look forward to.

One of the main things that were discussed in the call was Tesla Energy and how its increasing demand in the market was just turning out to be how the company expected it to be. The management announced in the call that it will be transferring the production of batteries that it was previously doing at Fremont to now be done at the Gigafactory, which is being carried out much before it was actually planned by the hybrid car makers.

This new change of plan by the auto makers shows that the giant is in a good position to report a stronger than before growth in the new few quarters, especially in the one right after the third one. One more thing that the giant is currently looking forward to is to spend much less in the upcoming year as it has been overdoing the spending in the present financial period. The decided numbers that should have been spent by the luxury car makers in the beginning of the year was around $1.5 billion for the whole year, but the auto company ended up spending around $1.7 billion in its expenditures, which actually has put the analysts in quite a worry about how much the giant seems to be spending when it really shouldn’t be doing so.

Analysts are also seen talking about how if the smart car producers cut down on the expenditures next year; they will turn out to have a better go at things in the stock market where a higher and better cash flow will also be witnessed. The giant has a lot to look forward to, with the expenditures lessening down and the returns from the battery making business increasing on a big level.