The gun has been fired for the 200 mile affordable electric car. And for two manufacturers in particular, it is not only a race against time but more importantly a race against each other. Tesla is locking horns with GM for the next generation of all electric, long range vehicle. Competition can only mean good news for the customers.
It can be safely said that Tesla sparked life back into the electric car industry just when GM pulled the plug on its own product EV-1. If it wouldn’t have been the raging success of Tesla Roadster followed by Tesla’s Model S, neither Chevy Volt or Bolt would have existed.
At present both manufacturers have the experience of several iterations of Plug-in vehicles with them. Tesla has the experience of Roadster, Model S and Model X. GM has the experience of EV-1 and Chevrolet Volt.
Although apprehensive at the start but GM has come a long way since the inception of Chevy Volt. There have been several iterations that have refined the model year on year. The 2016 model of the Volt is more practical, reliable and robust compared to its initial version that rolled out in 2011.
The Model 3 vs Bolt race may not be as exciting as the space race of 60’s but nonetheless is intriguing. It can be a tale of twist and turns as both GM and Tesla have tricks up their sleeves. There are other players that can prove to be the dark horses in this game. The competitive advantages/disadvantages of the parties involved in the 200 mile race are listed below:
Tesla Model 3
- Tesla’s present production capacity is 50,000 cars a year. Elon Musk recently announced plans for increasing production to more than 500,000 cars a year. This equates to a 10 fold increase in the current production capacity. It has been announced that Model 3 will be rolled out in late 2017. Orders of 250,000 units within the first 3 days of announcement is a welcome news for Tesla’s stocks. However even with the upgraded production facility of 50,000 units a year, it would take 5 years to meet orders on the book alone.
- Tesla has the advantage of having developed the leading battery-pack in the industry. A 200 mile car is not a novelty for Tesla. They have proven designs in Model S and Model X.
- Tesla has the “X” factor. To an extent it has the same awe, appeal and cult following that proved pivotal for Apple’s success of the I-phone.
- Tesla has already got a network of charging stations in place. They have a presence in every major city around the world and their outlets will more than double in a years time. Part of the appeal of Tesla is the availability of these charging stations that top-up the batteries for free throughout the life of the car. GM may have to ask Tesla to use their facilities or develop their own infrastructure. Either way it is going to cost them.
- When the Giga factory comes online, the price of the cells used by Tesla will drop as much as 30%. This equates to almost 22% reduction in the battery-pack price. In turn this reduction means that the price of car can be shaved as much as 10%.
- GM is venturing into the large battery pack- high mileage car- for the first time. Their current model of Volt has a range of only 53 miles if running purely on battery power. The Volt relies on I.C -generator to recharge the batteries and extend the range of its relatively small size battery pack. Furthermore GM has experience of working with Pouch cells in Volt and NiMH cells in EV1. Both these batteries have lower energy densities at the pack level. The chemistry of battery of the upcoming Bolt is a closely guarded secret. GM has revealed that batteries will be in line with the car platform similar to Tesla. This is a complete departure from their previous T-shaped battery used in the Volt.
- GM has both deep pockets and also the production infrastructure in place to cope with any fluctuations in demand. GM Chevrolet also carries brand prestige.
- GM has an established network of auto-dealers that will help push its product further in the market. Tesla cars on the other can only be directly purchased through the OEM.
GM’s launching of Bolt earlier than Model 3 is a two pronged attack. On one hand it will try to counter the expansion of BMW i3 with its early launch. On the other hand it will be aiming to undermine Tesla Model 3 through a pricing strategy. Market pundits are predicting GM will reduce Bolt’s price the moment Model 3 will hit the road.
The Chinese manufacturer BYD Auto, with its car Qin EV300 is the dark horse in the EV race. This car has a battery -pack of 48 kWh making the range a comparable 186 miles. Being placed 7th on the list of Top 10 electric cars, the Automaker has a strong grip on the Chinese market and has surged in to Latin -American market. While it may face stiff resistance by the US automakers, but a substantially lower price may just about cut it in the land of opportunity.
Not to be Overlooked
The BMW i3 has been voted car of the year in 2014 and despite its slightly higher price is one of the fastest selling cars in the EV market. It has been announced by BMW that the newer version of the i3 will have and extended range of 124 miles because of improvement in the battery chemistry. Previous range was merely 81 miles. This new range will surely sway both Tesla and GM customers towards their compelling product. BMW commands a strong brand prestige around the world. It has already sold more than 10,000 units of i3 in USA in 2015 alone.
The race for the 200 mile affordable car has begun. Tesla Model 3 Vs Chevrolet Bolt may just push the battery vehicle industry as a whole forwards. Lets enjoy the technological feat while it lasts.