Why Deutsche Bank Is Picking GM Over Tesla

By Chris Lange Updated Jan 12, 7:50AM EST · Published Sep 25, 1:35PM EDT

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Why Deutsche Bank Is Picking GM Over Tesla — © courtesy of Tesla Motors

General Motors Co. (NYSE: GM) shares made a handy gain on Monday following an incredible upgrade. When considering the autonomous vehicle (AV) industry, Tesla Inc. (NASDAQ: TSLA) comes to mind as the front-runner. However, this analyst actually believes GM can capitalize on this market far more than Tesla.

Deutsche Bank raised GM to a Buy rating from Hold with a $51 price target, implying an upside of 29.4% from the most recent closing price of $39.42. Keep in mind that this firm only has a Hold rating for Tesla.

Rod Lache was on the call for Deutsche Bank and he believes that up to 60% of U.S. households in cities might be more inclined to use autonomous vehicle services, as opposed to owning a car. At the same time, he went as far as to say that 2% of U.S. miles driven in 2025 will be through autonomous vehicle services.

The investment bank suggests that GM can grab about 17.5% of the total AV market share.

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In the report Lache said:

GM’s AV’s will be ready for commercial deployment, without human drivers, much sooner than widely expected (within quarters, not years), and potentially years ahead of competitors. We believe that businesses built off of this platform will ramp much faster than is widely expected. A fast ramp could perpetuate sustainable advantages. And we believe that this will be material, even to a company of GM’s size.

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Excluding Monday’s move, GM has outperformed the broad markets with the stock up over 13% year to date. Over the past 52 weeks, the stock is up about 22%.

Shares of GM were last seen up just over 2% at $40.34, with a consensus analyst price target of $38.87 and a 52-week trading range of $30.21 to $40.64.

Tesla shares were down over 1% at $346.62. The stock has a 52-week range of $178.19 to $389.61 and a consensus price target of $319.94.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.