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When General Motors CEO Mary Barra introduced the Chevrolet Bolt at the CES gadget show last year, she took a shot at Tesla.

Buyers can be confident because Chevy has 3,000 U.S. dealers to service the new electric vehicle, she said. The implication was that Tesla, with just 69 service centers nationwide, can make no such promise.

The uncharacteristic insult from Barra was designed to highlight the difference between 108-year-old GM and Tesla, a disruptive teenager. It also acknowledged a budding rivalry that could help determine whether Detroit or Silicon Valley sets the course for the future of the auto industry.

The tale of the tape favors GM. It has made billions in profits since returning to the public markets in 2010. GM got the Bolt, a $36,000 car that goes 238 miles per charge, to market before Tesla’s Model 3. Tesla, the 14-year-old company led by flamboyant CEO Elon Musk, has never posted an annual profit.

Yet, as both CEOs face shareholders for annual meetings Tuesday, it is Barra who must explain to skeptical investors why GM’s future is as bright as Tesla’s.

GM’s stock is trading around the $33 price of its initial public offering seven years ago. During that time, Tesla shares have soared more than tenfold to $335. Wall Street now values Tesla at about $55 billion, compared to around $50 billion for GM.

Despite efforts to paint themselves as technology companies, automakers can’t shake their giant, capital-intensive global manufacturing operations. The huge investment needed to build vehicles yields low profit margins compared with tech companies that make software or cell phones, says Michael Ramsey, an analyst with Gartner. GM’s net profit margin in 2016 was 5.7 percent. By comparison, Alphabet Inc., parent of Google, had a 22 percent margin.

Although it’s an automaker, Tesla started in the tech bucket and remains there in the eyes of investors and buyers, Ramsey says.

Tesla’s electric cars are the envy of the industry, and its semi-autonomous technology is among the most advanced on the road. Musk says Tesla’s California assembly plant – which used to be GM’s – will soon be among the most efficient in the world. And it’s branching into areas with potential for bigger returns, including solar panels, energy storage and trucking.

Tesla is absurdly overvalued if based on the past, but that’s irrelevant. A stock price represents risk-adjusted future cash flows,” Musk tweeted in April.

Still, Musk can’t risk any missteps as Tesla pivots from a niche manufacturer of 84,000 high-priced cars per year. The Model 3 sedan, Tesla’s first mainstream car, is due out later this year, but previous launches have been plagued with delays. Tesla has yet to prove it can build high-volume vehicles with quality and reliability, as GM does. Musk aims to make 500,000 vehicles per year in 2018; GM made more than 10 million cars and trucks last year.

GM, too, is stretching into new areas. Its Maven car-sharing service has 35,000 members in 17 North American cities, and it’s providing cars for ride-hailing services. GM is developing autonomous cars with Cruise Automation, a software company purchased last year. Its SuperCruise semi-autonomous driving system, due out this year, is designed to be safer than Tesla’s.

And GM isn’t the only automaker with a stagnant stock price. Of the seven best-selling carmakers in the U.S., only Toyota and Fiat Chrysler have seen significant growth in seven years. Ford, Honda and Hyundai all have lost value.

“Investors and the financial markets are much more interested in investing in the potential of what might be huge than in the reality of what’s already profitable and likely to remain so for years to come,” says Sam Abuelsamid, a senior analyst with Navigant Research.

Abuelsamid says GM could better trumpet its technology achievements. For instance, it scarcely markets the Bolt. By contrast, Musk builds hype with nightclub-like events for Tesla owners and Twitter banter with 8.8 million followers.

“The only way you can get people to perceive you in the same light as a company like Tesla is to demonstrate it,” Abuelsamid says.

Musk is crucial to Tesla’s success. The risk-taking billionaire founded PayPal and rocket company SpaceX before taking over Tesla. He espouses big ideas like Hyperloop high-speed transportation and colonizing Mars.

Barra, on the other hand, is a methodical engineer who rarely strays from script. She has only 29,500 Twitter followers. She’s a GM lifer who earned a company-paid MBA from Stanford; Musk left a Stanford graduate physics program after just two days to form a publishing startup.

“Mary is like a normal high-level performing executive,” Ramsey says. “Elon Musk is like an almost unrivaled superstar, even in comparison to Silicon Valley executives.”

Still, the big changes in the auto industry are in the early stages. Electric vehicles make up less than 1 percent of global auto sales and fully self-driving cars are years away. The economy can falter and company fortunes can shift. Already this year, sales in the U.S. and China are slowing, and GM pulled out of the European and Indian markets because they weren’t profitable.

GM knows the ups and downs of auto sales, but Tesla will have to learn to manage them. If the Model 3 is late and Tesla sales fall, its stock price could drop and reduce Tesla’s access to cheap capital, Ramsey says.

“I don’t think they’re completely immune to economic cycles,” he says. “That will be when we really know if Tesla can maintain this out-of-whack share value with their fundamentals.”
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The United States Army is taking another step toward developing autonomous trucks this month when it tests them on a Michigan highway.

The test, the first on a public road, will feature only flatbed trucks, but the technology could eventually be used in other military vehicles and could help protect troops on the battlefield.

As with the many tests of driverless cars, the trucks will have sensors to stay on course and communicate with one another. Also, like current driverless car efforts, the Army’s test will still see a human behind the wheel just in case something goes wrong.

“In order for automated vehicles to work and work correctly and work safely, that automated vehicle needs to talk very fast, sending data back and forth, first to the vehicles around it,” said Doug Halleaux, public affairs officer for the U.S. Army Tank Automotive Research, Development and Engineering Center (TARDEC) in an interview with the Times Herald newspaper.

One potential hurdle the test will have to overcome is crossing a steel girder bridge called the Blue Water Bridge. Researchers say the steel could present a challenge to the radar readings, possibly confusing the autonomous system.

The push for autonomous military vehicles stems from the number of deadly attacks on U.S. military convoys in Iraq and Afghanistan.

The Michigan highway will remain open to normal traffic during the testing.
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Social media companies like Facebook, Twitter and Google’s YouTube have stepped up both the speed and number of removals of hate speech on their platforms in response to pressure from the European Union to do more to tackle the issue, according to the results of an EU evaluation.

Facebook won particular praise for reviewing most complaints within a 24-hour target timeframe set down in a code of conduct agreed in December by the European Commission,

Facebook, Microsoft, Twitter and YouTube

Calling the results “encouraging” for the Commission’s push for self-regulation, Justice Commissioner Vera Jourova said the proportion of offending items taken down had doubled and action was being taken more quickly than when the EU checked six months ago.

“This … shows that a self-regulatory approach can work, if all actors do their part. At the same time, companies … need to make further progress to deliver on all the commitments,” Jourova said in a statement, adding that firms should provide more feedback to people who brought abuses to their attention.

Facebook scored highly on this, Twitter and YouTube less so.

The voluntary code of conduct obliges firms to take action in Europe within 24 hours, following rising concerns about the proliferation of racist and xenophobic content on social media triggered by the refugee crisis and attacks in Western Europe.

This included removing or disabling access to the content if necessary, better cooperation with civil society organizations and the promotion of “counter-narratives” to hate speech.

Facebook assessed notifications of hateful content in less than 24 hours in 58 percent of cases, up from 50 percent in December, according to the report.

Twitter also sped up its dealing with notifications, reviewing 39 percent of them in less than 24 hours, as opposed to 23.5 percent in December, when the Commission first reviewed the companies’ progress and warned them they were being too slow.

YouTube, on the other hand, slowed down, reviewing 42.6 percent of notifications in less than 24 hours, down from 60.8 percent in December, the results showed.

“IT companies have all been improving time and response to notifications on manifest illegal hate speech,” Jourova said at a meeting of the EU High Level Group on combating racism, xenophobia and other forms of intolerance on Wednesday.

“There are differences among the companies … but we can objectively say that all have improved.”

All the companies significantly increased the number of removals. Overall, content was removed in 59.2 percent of cases, more than double the rate in December which was 28.2 percent.

The proliferation of hate speech on social media has increased pressure on the companies to remove the content swiftly as they face the prospect of legislation at both EU and national level.

Last week EU ministers approved plans to force social networks to take measures to block videos with hateful content while the German government approved a plan in April to fine companies up to 50 million euros if they fail to remove hateful postings quickly.

The most common ground of hate speech the Commission identified was xenophobia, including expressions of hatred against migrants and refugees, together with anti-Muslim hatred, followed by ethnic origin.

The spread of fake news and racist content has taken on more urgency in Germany after the arrival of about a million migrants over the last two years.
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