Al Root
General Motors is targeting Tesla in a key strategy. Or maybe its just mimicking Elon Musk's electric-vehicle company.
Either way, whatever GM (ticker: GM) is doing can help both companies in the long run by generating new sales from advanced technology.
Tuesday, GM announced it will equip the ultraluxury EV, Cadillac Celestiq, with its highest-level driver-assistance technology dubbed Ultra Cruise, which is more advanced than the Super Cruise driver-assistance feature available on many GM vehicles today.
GM might bristle at the comparison, but its Super and Ultra product brands sound similar to Tesla's driver-assistance strategy. Musk's company offers Auto Pilot features, and a more-advanced system called Full Self Driving, or FSD.
Ultra Cruise will square off against FSD in the marketplace. These are the products that are designed to drive through cities, and not just manage speeds and lane changes on highways. GM says Ultra Cruise will be able to complete "95%" of typical driving tasks. It should be able to drive commuters to work on a clear day.
That kind of driving is what Tesla owners expect from FSD, too.
Both systems can drive a car, but both are so-called Level 2 autonomous-driving systems. At that level drivers need to be engaged 100% of the time. For GM, interior cameras make sure drivers are paying attention. That's why GM calls its system hands-free.
Tesla, and some other auto makers, require haptic feedback to keep its driver assistance systems on. Pressure on the steering wheel is how Tesla's system ensures drivers are engaged. It's an alternative strategy, and FSD isn't marketed as a hands-free system.
There are other differences between the two systems. Ultra Cruise uses more than 20 different sensors including cameras, radar as well as lidar, which is laser-based radar. GM didn't disclose its lidar supplier.
Tesla uses optical cameras as the eyes for its self-driving features. Tesla believes advanced software and cameras are the superior approach to developing autonomous cars.
The Celestiq should be on U.S. roads around the start of 2024. That will be an interesting time for drivers, and investors.
Tesla sometimes gets criticized for its aggressive approach to rolling out driver assistance systems and software. But the Ultra Cruise launch shows that traditional auto makers are trying to do similar things.
The goal for drivers is enhanced safety. Tesla believes FSD enhances safety and publishes quarterly reports to that effect.
The goal for both GM and Tesla is to generate new sales and profit streams to please investors. Tesla charges $15,000 for its FSD software. GM hasn't revealed pricing for Ultra Cruise yet.
Coming into Tuesday trading, GM stock is up about 20% year to date, while Tesla stock is up roughly 60%. Both are outperforming the S&P 500 and Dow Jones Industrial Average, which are up about 5% and 1%, respectively, so far this year.
Automotive shares are bouncing back after a difficult 2022. GM stock fell 43% in 2022, while Tesla stock dove 65%.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 07, 2023 09:00 ET (14:00 GMT)
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