GM vs. Tesla – The Real Story
GM's Mary Barra introduces the new Chevy Bolt. (Photo: Paul Warner/Getty Images)

GM vs. Tesla – The Real Story

At the Detroit auto show, General Motors’ CEO Mary Barra announced that the company will launch a new electric car in 2017, the Chevrolet Bolt, designed to have a single-charge range of 200 miles, and to sell at a comfortable price point in the range of $30,000 (after the substantial Federal rebate on electric vehicles).

And the papers are now full of stories from the auto show painting this as a serious attempt by GM to compete directly with Tesla, which plans to introduce its own medium-priced electric car by 2017, the $35,000 Model 3. Auto industry reporters covering the story paint GM’s initiative as a challenge to Tesla, a company described as GM’s key rival in the electric car category. According to these reporters, this is shaping up to be a head-to-head fight for the mid-priced electric vehicle market which, by 2017, should also be joined by a variety of other carmakers.

But I think most of these industry pundits aren’t fully grasping the nature of this story. Tesla almost certainly welcomes competition from GM, as well as from Toyota and any other traditional car manufacturer. Tesla wants GM and the others to be successful with their new electric car models, because the more success they achieve, the more credibility and infrastructure support will be gained for the entire electric car category, which will almost certainly benefit Tesla even more than the other companies.

How else can we explain the fact that just last year Elon Musk, Tesla’s iconic CEO, chose to freely reveal all of his company’s patents in the electric vehicle category? Musk probably hopes that GM has been able to accelerate its plans for the Bolt by capitalizing on some of these now-available patents.

Think about the costs that Tesla has been incurring, all by itself, to get this category kick-started. It has laboriously and single-handedly set up its own charging stations up and down the East and West Coasts. It has plans to set up quick-charge stations that will fully charge an electric car even faster than you can fill the tank of a traditional gas-powered car (essentially by dropping the battery out of the bottom of a vehicle and installing a fully charged one in its place). And Tesla is challenging state legislatures and car dealer lobbies in a number of states for the right to sell cars directly to consumers through Tesla stores, designed like Apple stores, rather than being required by outdated laws to set up franchised dealerships.

If they’re smart, companies like GM and Toyota will copy not just Tesla’s electric technology, but also the luxurious and completely frictionless user experience that makes the Tesla such a joy to operate in the first place. In many ways, Tesla isn’t really a car manufacturer at all. They are an information company with a high-end computer that has a surprisingly large number of car features. With just 17 moving parts, the Tesla Model S is almost constantly connected to the mother ship manufacturer, and its internal software is updated every week.

Nor are Tesla’s customers and fans just a bunch of climate-change do-gooders. They are mostly the kind of young, upper-middle-class early technology adopters who always have to have the latest i-Phone.

To paraphrase a famous GM tagline, the Tesla is not your father’s automobile.

Or, to use a word invented by the linguistically gifted George W. Bush, traditional carmakers are constantly “misunderestimating” the nature of Tesla’s real challenge.

Scott Park

Regional Supply Chain Expert | Technology, Industrial, Automotive, and Consumer & Retail

6y

Musk is the true inventor!

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Mark Clouthier

Johston Equipment - Battery Specialist - Sales

6y

Enjoy driving while you still can because it will not be here much longer. I think this article is accurate. Tesla will be the big winners but it will take about another 5-6 years before these cars are more reliable. It will also take this long to achieve the perception in people's minds and habits.

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Jesper Wille

Forretningsudvikling & vækst - theView Agency & Ventures - Relations in Business - Design Thinking

8y

It's actually the modern digital-age idea that any given company *absolutely has to own the entire market* that's weird. It was started by the likes of Microsoft and Amazon, who very quickly set this precedent - but generally it's much better to have a rich and varied marketplace in whatever area one works in, as this cultivates both the structures for the vendor (like, in this case, an ecosystem for electrical vehicles) and a culture for that particular kind of goods among the customer base. All of which a company has to do on its own if it has no competitors - a tiny little detail these companies tend to forget and, when they find out, try to skimp on (a common tactic is to try to trick and/or bully the customer base instead). Colloquially, there's a reason all the cobblers were on the same street in the old days, and all the smithies on another, and so on...

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Ramesh Ganesan

Mechanical Engineer, EV enthusiast, Business Consultant

8y

The future of electric mobility is hinged on the success of more entrants.. Even the $30,000 is a high cost. Attempts should be for a affordable, easy to maintain electric car which can cover a reasonable distance say 200 kms.. The charging stations and quick charge packs will hasten the acceptance of electric cars.. The need is to WIN over the Petroleum lobby..

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Robert Allen

Business Development for Energy Management Solutions - Get to Net-Zero

8y

Great article! Shame on the States blocking Tesla Stores that are not franchised dealerships. I say set up Ride and Drives in each major city, allow orders via app, and setup strategic service partners with existing service shops. However, the charging station infrastructure will still be needed.

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