Tesla vs. GM, David and Goliath
GM is currently the largest American automotive manufacturer with 40+ different models. However, Tesla isn’t far behind in value of the company, surpassing Ford in the recent months even with only has three models and two on the market. Between all these brands, there is only a handful of EVs. In recent years, EVs have become the newest advancement and Tesla has been leading the way. In my last article, I mentioned that the lack of EV models and development at the major manufacturers have remained stagnant and non-competitive with Tesla’s cars. But the future will undoubtedly consist of the majority of cars that run all on electricity. It’s only a matter of time before the major manufacturers start to change their manufacturing processes to mostly EVs. Considering that these major manufacturers have significantly more ground footing than Tesla, what will it mean for the small startup right now?
Tesla has just built and is building one of the largest factories in the world with plans to build 2 to 3 more. The total cost has amounted to almost a billion dollars for the factory. This is a huge amount for Tesla but building something like the Gigafactory for GM isn’t as big of a factor. GM’s value currently stands at $54 billion. However, Tesla is still valued at $48 billion, over Ford’s $45 billion. Tesla will undoubtedly be in the future, but how will they compete when GM, Ford, Volkswagen Group, and Toyota all start to try and produce the best EVs they can? These major manufacturers already have factories and production lines setup globally that could easily be retrofitted to produce EVs and their parts. Volvo has already announced that in 2019 they plan to only build electric cars and hybrid vehicles. This is the first major manufacturer to announce plans like this.
Production of EVs may not even come down to the company’s choices but of country’s laws and regulations. Norway, France and the UK have already passed laws to outlaw combustion vehicles by the mid-2020s. To remain in these markets, the manufacturers will need to build more competitive vehicles that rival Tesla and the soon to be produced Lucid Air. These vehicles boast fantastic numbers in every aspect, from Tesla’s model 3 low price of $35,000 (before incentives) to Lucid Air’s 1000 horsepower comparative rating. These cars are faster, more luxurious, and longer range than most of the cars the major manufacturers offer in their own models. When the major manufacturers start to really put effort into producing these types of cars, it’s very likely they will build even better cars.
If you look at automotive history, we are still in the early stages of EV technology. Consider the Tesla Model S as the Ford Model T of electric cars. 50 years after the Model T, we started to produce fuel injection, AWD transmissions, and luxury options. Imagine what the EV cars will be like in 50 years. One thing that is holding back EVs is the technology of batteries. They are heavy, expensive and not entirely efficient and takes a lot to produce. If the batteries start to improve, it would be a huge step forward for the viability of EVs in the future.
The major manufacturers are proving a large threat to Tesla. A few months ago, Ford was planning to inject close to a billion dollars into a new factory. However, they instead used the money to improve their current factory in Detroit. They could easily retrofit and build new factories to change the production lines to build high-quality EVs. It would be similar to how most automotive factories in WWII were retrofitted to build bombers and tanks for the war effort, just in a more environmentally friendly outcome.
As long as Tesla’s new Model 3 pays off, it will be able to cement the company as the leader in EV technology. Elon Musk has a plan to completely revolutionize the transportation industry between Tesla and the Boring Company to build a new national system for fast, self-driving, electric transportation. This plan, if implemented properly, could push America into the next generation of cars and set itself apart from the rest of the world.
Competition could be great for the industry; competition has always pushed technology forward. Major manufacturers competing with Tesla will push EV technology even further. It could be very good for the world and continue to make EVs even better than they are now. There is no doubt that EVs are better than most combustion cars. Once batteries improve and are cheaper, well-built EVs will be competitive with the rest of the market and they will become the main form of transportation. It’s only a matter of time.
La Monica, Paul R. “Tesla Is worth More than Ford — and GM Is in Sight.” CNNMoney. Cable News Network, 3 Apr. 2017. Web. 27 July 2017.
“CARS.” Http://gmfleet.com.prod-www.gm.plusline.net. General Motors, n.d. Web. 27 July 2017.
Caughill, Patrick. “Elon Musk Is About to Unveil the Future of Tesla.” Futurism. N.p., 06 June 2017. Web. 27 July 2017.
Hanley, Steve. “Tesla Model S vs. Lucid Air: Comparison of Range, Performance and Price.” TESLARATI.com. N.p., 20 Apr. 2017. Web. 27 July 2017.
Lambert, Fred. “GM Will Launch Several New Electric Vehicles Using the Chevy Bolt EV Platform.” Electrek. N.p., 13 Jan. 2017. Web. 27 July 2017.