GM finally gets its Tesla moment
Welcome to Buy/Sell/Hold, Marker’s weekly newsletter that’s 100% business intelligence and 0% investment advice. Each week, our writers Steve LeVine and Rob Walker make sense of the most important developments in business right now — and give them a Buy for clever moves or positive trends, a Sell for mistakes or missed opportunities, or a Hold if they’re noteworthy but too early to call.
🚘 GM finds its electric groove 🚘
The Buy/Sell/Hold Analysis
When it comes to electric vehicles, GM has spent a decade looking ambivalent. In 2010, the carmaker released the Volt, the world’s first major plug-in hybrid electric car. Then, in 2016, it debuted the Bolt, the first 200-mile, fully electric vehicle. Critics fawned over both cars, but GM seemed to shun the fanfare, designing the vehicles with what appeared to be almost deliberate frumpiness, and failing to promote either. Both have been sales failures, and last year GM stopped selling the Volt altogether.
What was with GM’s hesitation? Didn’t it want buzz? Didn’t it want to sell a lot of cars?
The doubts are finally over. In an ultra-splashy reveal this week, GM began to take orders for a fully loaded, all-electric Hummer. Within 10 minutes, its first-year production of the $112,000 vehicle maxed out reservations (each requiring a $100 deposit).
Company spokeswoman Michelle Malcho told me GM is not disclosing how many vehicles that actually means — but the video reveal excited lots of people. The reimagined Hummer boasts 350 miles of range on one charge, and, once you’ve driven down the battery, the capability for 100 miles of recharge in just 10 minutes. For drivers with a James Bond sensibility, the Hummer can raise itself up six inches and drive diagonally.
“If that’s not exciting for America, what is? That thing is a monster,” Pasquale Romano, CEO of ChargePoint, which operates a network of EV charging stations, told me. He said the vehicle was bound to get more people talking about EVs. “It’s creating aspirations.”
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One is reminded of the early days of Tesla. In 2008, Elon Musk’s company released the Roadster, which also went for about $110,000. It ignited the first modern frenzy around electric vehicles, though largely within the Silicon Valley community. The electric Hummer looks like that, only for the much larger cowboy crowd.
In the next few years, we’ll see the release of the electric Cybertruck from Tesla, the electric Ford F-150, and the electric Rivian pickup. But with the Hummer, GM may have improbably taken the lead on transforming the massive American love affair with the combustion pickup to an EV love affair. The secret, as Tesla has shown, is to make electrics fun and cool — not castor oil on wheels. With its Hummer, the newly unconflicted GM shows that it finally gets that.
Verdict: Buy
— Steve LeVine
⚡ Lightning Round ⚡
⚡ Apple’s latest streaming content play amounts to peanuts — literally. On Monday, the company announced that Apple TV+ was the new home to the iconic Peanuts holiday TV specials. It’s a poor trade for the tech giant to gain a short list of seasonal favorites in exchange for the bad will it’s creating by yanking Charlie Brown off network TV for the first year since the Christmas special initially aired in 1965. As it fights to keep up with Disney+, Netflix, and HBO Max, Apple should also take heed of a streaming service that just got sunk by its own bad will and haphazard content strategy: Quibi, which announced on Wednesday that it plans to shut down just six months after launching. Sell.
⚡ Impossible Foods and Bob Iger aren’t satisfied with oat milk in their lattes. In the same week that Impossible Foods announced it would spend $700 million in funding to double its R&D team and debut a new plant-based milk, it was revealed that Disney chairman and former CEO Bob Iger will take a seat on the board of Perfect Day, a dairy replacement startup. Companies like Impossible and Perfect Day argue that existing milk alternatives derived from soy, almonds, or oats aren’t adequate substitutes for dairy milk, and are racing each other to bring a product to market that matches dairy milk in terms of taste, nutritional value, and its ability to be turned into cheese. Dairy replacement companies aren’t just targeting adults, either: Some startups are working to replace breast milk, too. Hold.
⚡ The pandemic forced events to relocate to Zoom; now, Zoom wants to turn its good luck into diversified revenue. Last week, the company unveiled OnZoom, a new platform for businesses to host ticketed events. Zoom’s CFO told the Wall Street Journal that the company plans to charge hosts using OnZoom sometime next year, which could be when it expects to hit a ceiling in its off-the-charts, pandemic-driven revenue growth. Buy.
⚡ After filing confidentially for an IPO in August, Airbnb taps the Apple halo effect. The rental marketplace has hired Jony Ive — the famous ex-Apple designer who led the teams that designed products like the iPod, iPhone, and iPad — to help design “the next generation of Airbnb products and services,” according to CEO Brian Chesky. While Ive’s tenure at Apple saw the design of some of the most profitable, revolutionary tech products of all time, it’s not clear what he’ll be doing for Airbnb, an app that isn’t exactly renowned for selling physical goods. Hold.
📈 The Number: 40
That’s the minimum number of properties that CloudKitchens, the new venture from Uber founder Travis Kalanick, has spent $130 million buying up in cities such as Nashville, Las Vegas, and Portland, Oregon, over the past two years, according to a review of property records and data by the Wall Street Journal. CloudKitchens is a startup that sets up so-called ghost kitchens — cooking facilities without dining spaces that exclusively produce meals for delivery — which have gotten a lot of fresh attention in the pandemic era, as traditional sit-down restaurants have been hobbled by lockdowns, restrictions, and skittish consumers. Most ghost kitchen ventures rent space, and the decision to directly acquire so much property seems like a departure from the asset-light Uber model. The Journal reports that CloudKitchens is getting some good deals since the pandemic pummeled the commercial real estate market, but the secretive company has said little about its ultimate strategy. Certainly it has money to spend, having raised at least $400 million from Saudi Arabia’s sovereign-wealth fund. And Kalanick is hardly known for being risk-averse: Uber’s aggressive, daredevil style under his leadership was notorious. While Uber remains unprofitable (despite a new focus on, yes, food delivery), the risks worked out well enough for Kalanick himself — after stepping down under investor pressure in 2017, he cashed out his Uber shares for a reported $2.7 billion. CloudKitchens’ model — launched years before the pandemic — now looks prescient, but Kalanick’s next windfall depends on diners developing a taste for delivery that will outlast the lockdowns.
— Rob Walker
📖 Longreads of the Week: The inside story of how a Malaysian immigrant in Idaho with no particular expertise in audio became the podcast whisperer.
🔎 Marker’s New Fixation 🔎
Since her surprise primary upset of 10-term incumbent Joe Crowley in 2018, Representative Alexandria Ocasio-Cortez has been particularly skilled at leveraging social media as a tool for political communication, from fact-checking political commentary on Twitter to posting Instagram stories that provide an inside view into the inner workings of Congress. This past Tuesday, Ocasio-Cortez took her digital politicking to yet another platform: Twitch, the video livestreaming platform owned by Amazon that’s best known for hosting professional gamers. For nearly three hours, the congresswoman discussed voting and the November election as she streamed herself playing Among Us, a newly mega-popular video game similar to real-world party games like Werewolf or Mafia where players try to root out imposters. At its peak, the stream had about 430,000 concurrent viewers watching Ocasio-Cortez, Representative Ilhan Omar, and several popular Twitch streamers run around a cartoon spaceship attempting to foil each others’ plans. In doing so, Ocasio-Cortez — a vocal critic of Amazon and its failed bid to establish a New York City headquarters with $3 billion in government incentives — not only reached half a million potential voters on yet another digital platform, but also gave Twitch and its parent company a free, three-hour advertisement and days of earned media.
— Jean-Luc Bouchard, Senior Editor, Marker
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