ORION, Michigan – Ten years ago, a little-known tech entrepreneur named Elon Musk released a master plan for Tesla Motors, the fledgling electric car company he founded.
Breakthrough technologies always start impractical and expensive, Musk explained, so Tesla’s first car would be a convertible two-seater that would cost 110,000$. However, Musk promised that, by investing the proceeds of that car in research and production capacity, Tesla would quickly build several cheaper cars in larger volume, all to achieve an almost mythical goal: to create an electric car. that could travel distances greater than 200 miles on a single charge, but that this privilege costs less than 40,000$.
This year, Musk’s holy grail will finally hit the roads: a car that will travel 240 miles per charge and cost about $ 30,000 after a federal deduction. Musk’s master plan has happened just as he promised, save for one small detail.
I drove my first long-distance accessible electric car last month that blew my mind, and it’s not a Tesla. I had to fly from Silicon Valley to Detroit to handle it because it was not invented by a new and famous company, but by that old cliché of tarnished American manufacturing glory: Chevrolet, owned by General Motors.
The car is the Chevy Bolt EV, a compact, low, wedge-shaped hatchback. It is an important car for GM and, on a broader level, for the traditional auto industry. It shows how serious automakers are taking in the face of the threat posed to them by startups that promise to completely disrupt the auto business. Not only is the Bolt the first accessible electric car for long distances on the tarmac, it will also function as GM’s platform for testing new models for use in rideshare and autonomous vehicles.
The Bolt is also proof that in the auto industry, size does matter, and that although they have had a hard time adapting to the latest technologies, automakers can alter the car business even more radically than Tesla, simply as a result of his greatness.
Musk, The CEO of Tesla and SpaceX, has become used to embarrassing his detractors, but there are growing signs that his small car company is approaching the limits of its potential. This spring, Tesla unveiled its economy car, the Model 3, which will be worth $35,000 before deductions and will travel 346 kilometers on a charge – less than the Bolt does. Nearly 400,000 people have paid $1,000 to be on the waiting list to purchase the vehicle, which Tesla says will begin reaching customers in late 2017.
Yet few industry analysts believe Tesla will meet its production goals, and the mere fact that there is a waiting list highlights its fundamental difficulty. Tesla paved the way for mass acceptance of electric cars, but the Model 3 is, at the moment, just a prototype. GM’s Bolt goes on sale this year, and the company will likely be able to make more than enough to satisfy anyone who wants it.
It’s an exquisite irony: an arrogant billionaire promises great things on a blog; Ten years later, he fulfills his wish … in the worst way.
How did GM first create the car that Tesla dreamed of? There is a lot of fabric to cut from, as can be seen in the tour that the Bolt operations company has. GM began building one of the world’s most advanced battery testing facilities in 2008, around the time the company was facing imminent death after the financial crisis. Arguably, the car that emerged from this research, the Chevy Volt plug-in hybrid, truly saved the company. Politicians who supported the Detroit bailout frequently featured the Volt as evidence of GM’s creativity. President Barak Obama, who led the successful bailout, said in 2012 that he would buy a Volt after leaving office.
Most of GM’s advantages are, in essence, size and operating efficiency.
Tesla had to build a huge factory to fully produce the Model 3 batteries; GM outsourced electronics giant LG Chem for theirs. Tesla had to remodel a factory facility in Fremont, California, to meet its goals, while GM is accessing its existing production system. At Orion Assembly, the company’s plant outside Detroit, I saw the Bolts in the same row as the Gasoline-powered Chevy Sonics and Buick Veranos. Robots and workers seamlessly transitioned from the Bolt to more traditional cars as if there was no difference between them.
Finally, GM has the advantage of producing on a large scale. The Bolt is a low-fuel, zero-emission car that helps the company stay within government regulations to boost the economy. This allows GM to slyly continue to sell higher-profit, gasoline-guzzling cars like the Tahoe SUV. As a result, GM could lose money on every Bolt, and still, the entire project would have value on its bottom line.
Will Tesla be able to compete against these advantages?
Tesla fans (yes, they do exist) might point out that the Model 3 will have some fancy features that the Bolt won’t; These include the option of upgrading Tesla’s semi-autonomous management system and accessing the company’s network of fast-charging stations. Tesla also has a brand stamp and exclusivity, something that the Chevy does not have. And when your battery factory is running at full capacity, you should produce batteries at a lower cost, increasing your profitability.
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