Why GM Is Tesla’s Greatest Threat to Overtake the EV Throne
By: Dylan Hughes
Tags: Investing, Electric Vehicles, Sustainability, Business, Transportation

In recent years, much of the electric vehicle discussion has revolved around Tesla — a luxury EV company that is moving towards a more affordable future thanks to innovations in energy density and manufacturing.

As electric vehicles gain more momentum in the consumer markets, however, this is no longer Tesla racing against itself. The future of driving is electric — and autonomous — and the rest of the auto manufacturers are now investing in that future.

To this point, there is one legacy auto company that stands above the rest in electric driving: General Motors.

GM recently announced plans to up its spending on production and development of electric and autonomous driving through 2025 to $27 billion, up from the $20 billion plan announced in March.

Part of this plan includes releasing 30 models of electric vehicles by 2025, with more than 20 solely dedicated to North America. The company is planning for 1 million global EV sales by 2025 (Tesla, for comparison, has sold over 300,000 cars this year — representing an 18% market share; it sold 370,000 units in 2019 for a 16% market share).

To this point, Tesla has earned a firm hold on the EV market. In 2019, nearly half of the EV sales in America were the Tesla Model 3. When including Model S and X sales, Tesla held a 58% U.S. market share. The remaining 42% came from 52 different EV models from other companies.

These numbers make it very obvious: the barrier to entry for selling electric vehicles is quite high. Legacy car makers have yet to crack Tesla’s code, but GM seems dedicated to giving it a shot.

By Fall 2021, the company will have released two new electric vehicles: the GMC Hummer EV and Cadillac Lyriq. The Lyriq offers a sleek look to compete with the attractiveness of Tesla models while the Hummer offers impressive performance specs.

GM will also release a Terrain-like EV, a Buick and Cadillac SUV, an improved Chevy Bolt, and Chevy Blazer-inspired SUV in the coming years. To crack into the luxury market, there will also be the Cadillac Celestiq — which the company will build by hand, producing fewer than 500 models a year.

New names and models don’t necessarily give GM an edge over its competitors in the market, particularly Tesla. But it’s supposed innovations in battery development might.

GM will be using what it calls an Ultium battery cell in its electric vehicles, produced in a joint venture with LG Chem. The company claims that the Ultium battery will cost nearly 60% less than currently-used batteries and offer a range of up to 450 miles.

The battery performance and cost will play a huge role in the inevitable Tesla-GM battle of the decade. The truth is, debating on the better of the two future battery technologies is worthless at this time, as they are — after all — future technologies. Both companies have made bold claims, but until those batteries make their way into cars, comparisons won’t yield any worthwhile analysis.

Tesla should probably get the edge as they have been using Panasonic’s well-produced batteries for years, giving them the research and testing advantage. Soon, Tesla will be producing its own battery.

GM seems confident that its battery technology will beat Tesla in the long run, but that could simply be a marketing ploy. GM doesn’t need superior battery performance to beat, or at least compete with, Tesla, though.

GM has the advantage of holding four huge car manufacturers — GMC, Buick, Cadillac, and Chevy — underneath its umbrella. The company will be able to offer a much wider variety of electric vehicles and reach a larger audience of buyers. While Tesla is slowly expanding its offering and lowering costs, GM has the resources, brand loyalty, and (seemingly) capability to make a larger splash in the EV market than it has to this point.

Autonomous driving is another area where GM could have an edge over Tesla. Through its subsidiary, Cruise, GM will soon be testing self-driving vehicles on the roads of San Francisco.

GM has interesting plans with Cruise. Through the Cruise Origin, GM will be rolling out driverless vehicles — that are literally impossible to drive, as they will have no steering wheels — for ride-sharing.

Tesla would seemingly have an advantage in the autonomy category as well, seeing as though its Autopilot program has been collecting data for years. Cruise has been collecting similar data, however, and has even made use of the pandemic in San Francisco, sending its vehicles out to make contactless food deliveries.

Dethroning Tesla will not be easy for GM, and it may never actually be done. Tesla sells more than three times the EVs of any other singular company worldwide, giving it quite a large lead on the competition.

GM is firmly embedding itself in the race either way and seems unafraid of challenging the current EV King.

The performance, cost, and longevity of the battery technology will play a huge role in this race, and GM doesn’t seem phased by Tesla’s advances in that area, either.

For GM to make a true run at Tesla’s crown over the next 5-to-10 years, constant innovation and exciting product development will have to be a top priority. If the company can turn loyal gasoline-powered car buyers into electric vehicle fanatics as Tesla has, GM will gobble up worldwide EV market share.