Tesla’s Newest Electric Enemy: Chevy

GM and Tesla are both going after the middle market with the release of their newest electric cars.

GM Battles Tesla in the Electric Car Market

Forget about old grudge matches like Chevrolet vs. Ford or Honda vs. Toyota. The fight brewing between General Motors and Tesla Motors is shaping up to be nastier. Both will soon be going after the customer who can spend $30,000 or more on an electric car, as GM launches the Chevy Bolt at the end of this year and Tesla begins selling the Model 3 in 2017. GM showed off the Bolt in January, and Tesla will unveil the Model 3 on March 31.

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GM is positioning the Bolt to sell to the masses, which will help the company meet regulatory targets for required zero-emission vehicle sales, and to highlight technology GM developed with its first electric car, the EV1, introduced in 1996. When GM stopped EV1 production in 2002, Toyota became the darling of green-friendly buyers with its Prius hybrid. Tesla, meanwhile, is looking to the Model 3 to prove it can sell battery-powered cars to a mass market and turn a profit.

Both cars will start at $30,000 or less after federal tax credits of $7,500 are applied. And both go at least 200 miles on a fully charged battery. The Bolt is a five-passenger hatchback that boasts cargo space and more legroom for rear passengers—front-seat backs are an inch thinner than in most cars. Tesla has kept details under wraps, but the Model 3 is expected to be about the size of a BMW 3 Series.

At the Consumer Electronics Show in Las Vegas in January, GM Chief Executive Officer Mary Barra, describing the Bolt’s virtues, said, “Bolt customers won’t have to drive to another state to buy, service, or support their vehicle.” Tesla owners outside California must sometimes travel long distances for maintenance and repairs; the company has fewer than 100 stores nationwide, while Chevy has 3,000 dealers.

In February, Tesla CEO Elon Musk said he welcomes the Bolt to the market, but doesn’t see it as a rival. “You should think of the Model 3 as sort of really competing in kind of the BMW 3 Series or Audi A4 market,” he said. Musk has successfully targeted luxury brands such as Audi, BMW, and even Porsche with the Model S, Tesla’s first full-size EV, which hit U.S. streets in 2012. It now starts at about $75,000 and can go well beyond $100,000.

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The 2017 Chevrolet Bolt EV. 

Source: Chevrolet

Chevy will market the Bolt on its value and practical features. “Frivolous gadgets” won’t cut it, says Darin Gesse, marketing manager for electrified vehicles at GM. Are the falcon-wing doors on the Tesla Model X frivolous? “They’re in that neighborhood,” he says. Musk has said that the doors aren’t just for show; opening upward, they make it easier to get in and out of the car.

Tesla first pushed its cars as sporty and unique, and then as electric and green, says Alexander Edwards, president of San Diego marketing consultant Strategic Vision. That’s why sales have increased even as cheap fuel has battered hybrid-electric cars like the Prius. Despite the companies’ different marketing approaches, Edwards says, the 8 percent of new-car buyers interested in an electric car will look at both the Tesla and the Chevy models.

The bottom line: GM and Tesla have a lot riding on the release of their newest EVs, as both companies go after the middle market.

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