If You're Wondering Why Automakers Can't Stop Talking About Mobility, Wonder No More

Matt Posky
by Matt Posky
if you re wondering why automakers can t stop talking about mobility wonder no more

“Mobility” is easily the most overused term in today’s automotive vernacular. Despite being incredibly nonspecific, executives can’t help but make it the bookend of most speeches involving long-term goals and production stratagems. But why?

The term itself pertains more to the industry itself than the specific products it’s developing. While “mobility” can be applied to any conveyance with a technological bent, the word also represents a company’s ability to move into other areas of business. And that’s what gets the investors and market analysts tugging at their collective collar, damp across the brow, so red hot they can’t help but raise the stock valuation of any company that seems poised to make a big move.

Tesla’s entry as novel manufacturer with a unique product was enough to send its share price through the roof, and established automakers took notice. Despite Mark Fields’ best attempt to rebrand Ford as a tech company, he couldn’t bottle that same lightning and paid the ultimate price — getting fired. However, General Motors may be succeeding where Ford initially failed. The proof of the pudding is how high its share prices continue to climb.

Increasing by 17 percent in the past month alone, GM’s share price is now higher than ever. The largest contributing factor has everything to do with the mobility angle. Chevrolet has released a well-received electric vehicle, Cadillac has unveiled its semi-autonomous Super Cruise system, and Maven is coming at ride-sharing from all angles. Add in General Motors’ ambitious test fleet of self-driving electric cars and you’ve got a recipe that’s causing investment analysts to double over with erotic pleasure.

They love this sort of thing. So much so that there seems to be an underlying phobia on Wall Street that traditional automotive manufacturing might die out if companies don’t branch out into other arenas.

“Investors and the startups in Silicon Valley assume that GM and the other car companies are dinosaurs and it’s just not true,” Morningstar Inc. analyst David Whiston told Bloomberg. “It’s not like they just started working on autonomous cars because of Tesla.”

However, the attitude that tech companies will pave the way to autonomous technologies is changing. Automakers have a huge advantage here. They know the hardware better than anyone and possess the means to procure the missing technology necessary to bridge the gap, then test it relentlessly.

As a result, investors have begun betting that General Motors and its ilk will probably be the first groups to effectively field self-driving cars. Ford is also preparing an autonomous fleet for taxi and delivery services and, after a news spree in August, its share price also crept upward for the first time in a while. But the big money is still on GM, according to Bloomberg. Investors the world over are hyping up GM as the next big thing on Wall Street.

“Traditional automakers, and GM especially, are fundamentally better businesses today than they have been in the past,” wrote Barclays analyst Brian Johnson in a note to clients. “Whereas previously investors viewed GM as a dying dinosaur, investor attitude seems to be rotating that GM is instead an evolving mammal.”

Johnson raised his price target for General Motors’ shares from $41 to $55. Still, on a longer timeline, some investors are prepared to speculate much higher than that. Earlier this month, Citi’s Itay Michaeli claimed the automaker could climb as high as $134 per share — attributing some of that valuation to a hypothetical robotic taxicab business GM doesn’t currently possess. Analysts have suggested spinning off that not-yet-real company would be worth an estimated $30 billion.

So, if you were hoping this mobility talk would die out, you’re in for some disappointment. Investors still absolutely love the tech industry and the more tech-focused and diversified automakers become, all the better for their share price.

Enthusiasts may look at the finished products and wonder if it’s too complicated, too expensive, and not-yet proven. But investors won’t. They’ll catch a whiff of circuit board, hear someone say “mobility,” and recommend buying — leaving automakers with little recourse but to press aggressively onward.

[Image: General Motors]

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4 of 13 comments
  • Lorenzo Lorenzo on Oct 24, 2017

    I'm still convinced that FCA has a chance to survive, or last longer than expected, because it doesn't have the billion$ other car makers will be throwing at "mobility" and electric cars, and will have to stick with the lowly internal combustion engine and traditional vehicles.

    • See 1 previous
    • Geozinger Geozinger on Oct 24, 2017

      @JohnTaurus I think FCA is doing autonomous cars the right way, leveraging a partnership with companies where that is their mission. FCA builds the cars, vans or pods, Waymo does the rest. Not a bad idea, actually.

  • Turf3 Turf3 on Oct 24, 2017

    Please note that "technology" is not a synonym for "computer software". All of the following are technologies: Vapor-compression refrigeration systems Ackerman steering Hydraulically actuated automatic planetary gear transmissions Deep drawing of high strength steel body panels Nodular cast iron crankshafts Front and rear crush zones for crash safety Radial tires Catalytic converters High strength high integrity die castings of light metals Fiber-reinforced plastic suspension springs Selective placement of laminar and turbulent flow patterns and the transition between these regimes for minimum aerodynamic drag Etc Etc Etc.

  • Sgeffe Why on Earth can’t you just get the torque specs and do it yourself if you’re so-inclined?!
  • Sgeffe As was stated in another comment, the FAA nominee went down in flames. But the NTSB chairwoman certainly didn’t, and she’s certainly not qualified either!Lots of this kind of stuff going on both sides of the aisle—Ben Carson would have arguably made a better Surgeon General than HUD Secretary under Trump, for example.
  • Art Vandelay Interesting, the Polestar 2 I had as a rental utilized Android Automotive which is what GM said it is going to exclusively, yet it still offers Apple CarPlay according to this. Wonder if GM will do the same.
  • Stuart de Baker EVs just aren't ready for prime time for those with a single car and who take road trips. Being able to charge as soon as you arrive at a charging station, and even the chargers working on your car is a crapshoot. In the former case, you could have to wait for nearly an hour while someone else is charging.I also don't find EVs particularly fun to drive (I've driven a Tesla Model S and an Ionic 5.) I LOVE driving my '08 Civic (stick). I love the handling, the feel and responsiveness of the engine, the precise steering (the Michelin Pilot Ultra Sport tires help, but even with the snows on, the car is a joy). I have 152k on the clock, and hopefully another 25 years or so of driving (I was born early in the Eisenhower Administration and I have exceptionally healthy habits), and I'm going to try to keep the Civic for the duration.My Civic causes a less global warming emissions than some of these humongous battery operated trucks.
  • FreedMike They should throw in a Lordstown pickup with every purchase. Make it the “vapor twofer.”