General Motors: Chevy Bolt Should Keep Tesla Motors Inc Up at Night

General MotorsTesla Motors Inc Won’t Sell the First EVs to the Masses

General Motors Company (NYSE:GM) will deliver its mass-market electric car before the assembly of the first Tesla Motors Inc (NASDAQ:TSLA) “Model 3” even begins. As Tesla fans continue lining up, hoping to be among the first to drive the new Model 3, few realize that GM has a cheaper alternative in the works. Better yet, it will offer similar performance to the Model 3 and customers won’t have to wait long to get into one. That is bullish for GM stock.

What GM’s new “Chevrolet Bolt” lacks in Tesla hype, it more than makes up for in performance. More importantly for GM stock, the Bolt will beat the Model 3 on the crucial issue of availability. Indeed, GM says the first customers will drive Chevy Bolts off the lot in late 2016. That’s more than a year earlier than the Tesla Model 3—and that’s if Tesla manages to honor its delivery schedule.

So far, as the “Model X” has shown, that is not a guarantee. Theoretically, the first customers will receive their Model 3 in late 2017 at the very earliest. Given the epic wait times—which Musk joked about at the presentation of the Model 3—2018 or even 2019 sounds more realistic. Model X customers are still waiting

Still, car companies have loyal fans and this is one of the more interesting aspects of the automobile industry. Whole families reveled in rivalries between Ford, Chevrolet, or Dodge. This was especially true in the 1960s era of muscle cars. Ferrari and Alfa Romeo fans are rather passionate about their favorite cars, as are Jaguar, BMW, or Mercedes Benz owners. Tesla has certainly built an equally passionate group.

So passionate are the Tesla aficionados that the Model 3 has garnered over 276,000 pre-orders. In addition, each of these enthusiasts happily parted with $1,000 to book their Model 3 with a down payment. Some Model 3 intenders flew in from everywhere just to see the 20-minute presentation on March 31. (Source: “Chevy Bolt equals Tesla Model 3 minus the hype and two-year waitlist?,” ExtremeTech, April 5, 2016.)

Call them “Muskboys” if you like, but to Tesla’s credit, the company has built a tremendous reputation worldwide that goes beyond reason. That has worked in favor of Tesla stock. The problem is that just as a young love can generate resentment when expectations fail, Tesla risks far more than a reliable and established car brand like GM.

Nevertheless, those considering buying an electric car simply to avoid filling up at the gas station, with the benefits of not being in a cult, will like the Chevy Bolt.

Ironically, GM stock started to sink on March 31, just as Tesla’s stock was rising in enthusiastic anticipation of the Model 3 launch. Since December 2013, GM stock has not even come close to the $40.00 mark. Its next best high was $39.00 in March 2015. Nevertheless, the Bolt marks a technology shift that should help GM stock hit new highs. That is, of course, when the public wakes up to the fact that Tesla is not the only electric carmaker in the United States.

GM is also speeding up the development of self-driving technology, to be used in a new range of electric cars. GM has a new unit to develop its new range of electric cars. It has appointed a special team, focused on their development. Doug Parks, who started working at General Motors in 1984 and who once headed global programs, will lead the new team starting on February 1. (Source: “GM Assembles Dedicated Autonomous Vehicle Development Team,” Forbes, January 29, 2016.)

Parks reports to Mark Reuss, the head of GM product development, on such areas as batteries, electric powertrains, and driverless software. Parks has already gained considerable experience in these areas. General Motors will invest some $4.5 billion in the research and development (R&D) of new electric and hybrid-electric vehicles.

GM has many competitors. The company is not taking the challenge halfheartedly. GM stock will benefit from what is the company’s largest ever investment in R&D for electric vehicles. This will help GM understand the nature of global demand for more efficient and cleaner vehicles.

GM’s electric vehicles will appeal to drivers who would never have considered buying an electric car, by making electric propulsion more affordable and more practical and offering customers innovative buying and ownership experiences. GM has a different vision of how to adapt the new technology for the market and the new Bolt EV will take the fight directly to Tesla’s Model 3.

GM has not yet announced the Chevy Bolt’s EPA range. GM said it would be at least 200 miles. This makes it comparable to the Model 3. Yet, the Bolt is light for an electric. Its mass is 3,580 pounds. This is 827 fewer pounds than a Tesla “Model S,” which means that it should easily beat that Tesla model on range—and perhaps even the Tesla 3.

GM’s low-cost Bolt has just as exclusive technology as Tesla’s vehicles, too. Reuss stressed that GM would adopt a different “electrical architecture” for its EV lineup. (Source: “This is the production Chevrolet Bolt,” Autoweek, January 7, 2016). GM has also made EV technology cheaper. Its lithium ion batteries are cheaper than the competition’s, at $145.00 per kilowatt-hour (kWh). These are close to Tesla’s costs and lower than other manufacturers’. By 2020, those costs could fall to $100.00 per kWh. (Source: “How GM plans to beat Tesla,” Yahoo! Finance, October 19, 2015.)

The Bolt has it all: lots of advanced technology, a price in line with expectations ($30,000), and a 200-mile range, more than enough for daily use. Moreover, GM is hardly a new player in the EV market. GM brings all the experience it accumulated in the “Volt” and “Spark” to the Bolt at a mainstream price.

GM said the Bolt EV is able to accelerate from zero to 60 miles per hour in seven seconds. Its interior features a central 10.2” touchscreen featuring the “Chevrolet MyLink infotainment” system. The Bolt also has another interesting feature called “Surround Vision.” This gives the driver an overhead view of the car, useful while parking or while traveling in town at a low speed. The Bolt, rather than the Model 3, is the “first electric for the masses.”

“Long range, short wait. From concept to pre-production, the all-electric 2017 #BoltEV is staying ahead of the curve,” tweeted GM. (Source: Ibid.) In 140 characters or less, GM has made the case for its Bolt stealing the “electric car for the masses” label way from Tesla.