Old economy motor shares did better than those of the new economy, at least on Thursday. If it was a Car Wars day, then the traditional autos of General Motors (NYSE:GM) beat the limos of the future Tesla Motors Inc (NASDAQ:TSLA) on the stockmarket.
After much build up and anticipation and a few publication delays, Elon Musk, the driver behind Tesla, the lithium battery-powered carmaker, announced his so-called second Master Plan on Thursday.
He said Tesla would be branching out from autos into creating a "solar-roof-with-battery product" that people can have fitted to their homes.
He wants the Tesla electric car range to cover all types of ground vehicles, specifically buses and trucks.
And once the cars have full autonomous driving capability, Musk said Tesla would allow owners to add their cars to a shared fleet, meaning the vehicles can be making money for their owners when they are not using them.
But Musk began by trying to find closure, emotional and business, on the first Master Plan he wrote a decade ago and which he proudly explained was not in its final stages of completion.
But while many criticise that in fact his first Master Plan has failed to live up to all the claims and has yet to be completed, many more observers are laying into him for launching a second Master Plan before the first is truly tucked up in bed.
The Master Plan is also seen as a way for Musk to butter up investors to accept the justification for his proposed SolarCity Corp (NASDAQ:SCTY) buy out.
But Oppenheimer senior analyst Colin Rusch on Thursday branded the Tesla-SoclarCity merger not a good use of capital and said it could impact negatively on Tesla’s share price.
On Wednesday, Tesla's CEO told The Wall Street Journal that he expects a two-thirds majority of shareholders to vote in favor of the company's proposed merger with SolarCity. Musk has aggressively advocated for this position, assuring that synergies exist between the two companies.
But Rusch hit back that that he was hoping to see Tesla generate cash rather than spend it.
Given the references to autonomous driving in the latest Musk Master Plan Missive, Rusch also questioned whether a shift in the US government's view on autonomous driving could impact the automaker's value.
Rusch referenced a mandate released by the National Highway Traffic Safety Administration that announced plans for research on safety issues and state recommendations related to the testing, licensing and regulation of "autonomous" or "self-driving" vehicles.
Rusch said he wasn't surprised by the mandate and understands the NHTSA's goal of appropriately regulating the emerging technologies to ensure driver safety.
NHTSA expects for the first phase of its research to be completed within the next four years.
Within that time, it is possible for the government's view of autonomous driving to shift to a more hard-line approach and consequently affect Tesla's stock value. Where’s the brake pedal anyone?
Meanwhile, it was a good day for General Motors. The world’s third-biggest automotive released its second quarter earnings which showed it earned $1.86 per share, well above estimates of $1.52 a share. Revenue beat forecasts, as well. GM also raised its full-year outlook and reported its first European profit in five years.
A company which only eight years ago went with a begging bowl to the White House as the financial crisis erupted, was now seeing a rosy future.
General Motors closed up 1.7% at $32.03 Meanwhile, Tesla was down 3.4% at $220.50 and SolarCity closed down 2% at $26.40.