Chevy Bolt Production Begins - Three Advantages GM Has Over Tesla

The concept that an affordable battery electric car can succeed in the marketplace is an untested theory. Despite EVangelists’s claims that all consumers “need” is about 40 miles of range, no affordable battery electric vehicle has broken into the mainstream if sales are any measure. Most of the top-selling affordable electric vehicles are not battery-electric, but plug-in hybrids or range-extended EVs with gasoline generators. Both GM and Tesla are planning to test the market with a new EV offering with a battery range about half that of a typical gasoline car. Chevy's Bolt will be the first to market by a year, perhaps two.
- 2017 Chevy Bolt vs. Tesla Model 3 Detailed Comparison

Reuters* reports that, as you read this, about one in every four or five of the vehicles rolling off the line GM’s Orion plant are Bolts. The plant can produce 90,000 vehicles per year and is also making Sonics. This is GM’s first strength. The company knows how to produce cars in volume based on nearly a century of doing so. Tesla never has. GM can adapt its lines to build multiple similar vehicles and shift production to meet demand. Tesla’s Model3 will be built on its own line with no other vehicle sharing its platform. Much later a second derivative of the Model3 may also be made on that line, perhaps a compact crossover, but that could be five or more years away.
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General Motors also has another advantage over Tesla. It has a huge captive audience to which it can sell, or trade, or lease, or lend, or even give cars to. GM’s Lyft ridesharing network partner may be the perfect way for GM to boost sales volume, particularly early on. This network is in place now and operating. Any Telsa-related ridesharing network of any significance is years away. Tesla could certainly sell or lease cars to any ridesharing network it could find as customers, but GM already bought into this market.

A third advantage GM has to get the affordable battery-electric vehicle to succeed is fleet sales. GM has as much or more fleet selling experience as Ford, and these two dominate the marketplace with FCA US a third player. If the Bolt can succeed in the way that all EV advocates hope a battery-electric can, the Bolt could be a popular fleet vehicle. For example, Solar City now uses gasoline-powered subcompact Ford and Chevy vehicles in its business. Other solar installers, now in direct competition with Tesla will consider the Model3 a competitor. Truthfully, this is just an easy to illustrate example. Municipalities, utilities, delivery companies, and any company with a network of small vehicles looking to cast a green shadow can, and will, be targeted by GM as possible customers for its Bolt. (More on page 2)

Tesla has many advantages as well. This is certainly not a definitive market penetration analysis. We'll save that for the day that Tesla actually builds a production Model3. Now that Chevy has begun production, GM has one, possibly as many as three years to get ahead of Tesla in a limited market. One possibility very few stories comparing the Tesla Model3 to the Chevy Bolt consider is that both could succeed. Or both could fail to sell in what are considered mainstream volume, as every prior affordable battery-electric vehicle has.

*Reuters Story.

Related Story: AT 238 miles per charge, Chevy Bolt ranks as Tesla Model 3 beater