Here’s How General Motors Plans To Compete Effectively With Tesla

The electric vehicles ( EV ) space is getting intensely crowded with several traditional automakers launching EVs to meet regulatory requirements and the changing consumer preferences towards clean energy and autonomous vehicles. While Tesla has been an industry leader in this segment, the company does not have a proven mass production model and serious doubts have been raised on its ability to deliver a mass produced, cheaper electric car. While Tesla is likely to launch an electric truck and a compact SUV (Model Y) by late 2020 , General Motors ( GM ) seems to be ahead of the game in terms of the electric SUV launch.

At the recent Barclays Global Automotive Conference in New York , GM's CEO Mary Barra presented the company's plans for an "all-electric" vehicle portfolio and revealed that two electric crossover SUV's will be launched in the next 18 months. The company has already announced that it will launch 20 new electric vehicles by 2023. However, the key takeaway from the presentation at the Barclays conference was that GM's CEO is focused on building a "profitable" EV platform. The company's modular EV platform which is likely to be ready by 2021, will cut battery costs from $145 per kWh for the current Bolt EV to under $100kWh. Battery costs are the key determinants of the price and margins for an EV manufacturer and this technological advancement can ensure that GM is able to competitively price its EVs and generate profits at the same time, thus competing effectively with Tesla.

GM's aggressive EV plans, along with a clear roadmap for execution, put it at an advantageous position over Tesla. The company is likely to have a broader portfolio of EVs (including SUVs) by 2023, while Tesla is likely to have only a few models. Further, GM's strong position in China will allow the company to take advantage of the regulatory push in the region towards clean energy vehicles, leading to higher demand for its EVs.

Click here to see our detailed analysis for General Motors.

We believe General Motors' focus on building a profitable EV platform will give the company a huge competitive advantage and make it one of the leaders in the changing automotive landscape. While most players are looking to develop expertise in this space, GM seems to be ahead of the game, at the moment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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