General Motors Company Beats Tesla at Its Own Game
General Motors Company (NYSE:GM) has the weapon to deal a heavy blow in the electric car market. Indeed, if investors only realized the potential of the new “Chevrolet Bolt” (Chevy Bolt) electric car, GM stock would be trading much higher today. GM is about to launch the new Chevy Bolt, which is affordable at about $30,000 after tax credits.
GM shareholders will not have to wait long to see the effects. GM stock will start to react to the news of the Chevy Bolt very soon, and most likely in a bullish way. The Bolt will hit showrooms before the end of this year. It has a long range of at least 200 miles on a single charge. Those figures are in line with Tesla Motors Inc’s (NASDAQ:TSLA) entry-level “Model S 60,” which costs $50,000 and offers a range of 208 miles. (Source: “We Drive the $30K Chevy Bolt, GM’s Tesla-Walloping Electric Car,” Wired, September 13, 2016.)
It gets better: the U.S. Environmental Protection Agency (EPA) has rated the Bolt at over 230 miles in range. That’s the key to selling more electric cars, because it quells drivers’ fears of running out of charge: range anxiety. (Source: Ibid.) Just about anyone interested in buying an electric car has expressed interest in the Tesla “Model 3.” It so happens, however, that this much-ballyhooed car offers few, if any, advantages over the Chevy Bolt. Meanwhile, GM’s Bolt will have the huge advantage of coming to market at least a year before the Tesla Model 3.
Actual Human Testers have Driven the Chevy Bolt
The Chevrolet Bolt is actually here and, unlike the Model 3, someone has already attested that it can accelerate from 0-60 mph in 6.5 seconds. In a road test in California, the Chevy Bolt also managed to impress with its range, roominess and comfort. (Source: Ibid.)
Tesla has promised to sell thousands of Model 3s. It has built up an order book of some 400,000 cars, with prospective owners putting down $1,000 payments for cars that aren’t there yet. As for the Chevy Bolt, it is meant to impress Millennials and to bring them into GM dealerships. Once there, they can see other GM cars like the hybrid “Volt,” of which the company has sold 100,000 since 2010. (Source: Ibid.)
Here’s the bullish argument for GM (whose market cap of $48.23 billion is, relatively speaking, hardly as impressive as Tesla Motors’ $30.0 billion cap, considering the 100 years in age difference). For GM, the Bolt is a “strategic asset.” It’s barely scratching the surface of the 9.9 million vehicles per year it sells worldwide. For Tesla, the Model 3 is a make-or-break proposition. Tesla stock could crash if the Model 3 suffers a long delay. The same could happen if the Model 3 fails to meet expectations, or if it loses market share to the variety of electric cars that are going to become available in the next few months.