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General Motors reported strong first-quarter earnings on Thursday. After earnings were released, CEO Mary Barra and CFO Chuck Stevens answered questions from analysts on a conference call.
Several analysts hit on the same point, asking Barra if GM had any plans to create a separate brand for its electric vehicles.
Over the past few months, GM has rolled its Tesla-fighting Chevy Bolt EV, which will sell for less than $35,000 after tax incentives, invested in ride-sharing service Lyft, and acquire self-driving startup Cruise Automotive.
Barra sidestepped the question by stressing that GM’s electric vehicles, which live under its Chevy nameplate, add value to specific brands rather than needing a brand of their own. But of course she was probably thinking, “Why would we create out own in-house Tesla when EVs when they currently make up such a tiny percentage of the market?”
The questions also makes you wonder if Wall Street has forgotten some recent history. One of the positives of GM being bailed out and going bankrupt in 2009 was that it got the chance to streamline its brand portfolio, losing Saturn, Saab, Pontiac, and Hummer. Oldsmobile had gone away a few years earlier. That left GM with Chevrolet, Buick, GMC, and Cadillac – and manageable cluster that wasn’t going to consume the excessive resources that the old brand structure had.
However, GM has created another operating unit, separate from the mothership: It’s called “Maven,” and it’s intended to enhance GM’s ability to leverage its Lyft investment of $500 million to develop ride-sharing program for urban environments.
Maven won’t be building cars, however, the the vast cost associated with supporting a whole new automotive brand, focused on EVs, isn’t present.
Brands have also been dropping off the auto landscape of late. Toyota dropped the curtain on its Scion brand and Toyota decided against spinning Prius off as a separate brand for gas-electric and plug-in hybrids.
Car companies take brands very seriously and would never dilute one as important as Chevy to capture a small number of customers who prefer their electric cars to come with a whiff of the new. So it was a zany request – and a somewhat alarming indication that Wall Street is struggling to understand what’s currently going on with the car business.