GM executives will face one of their toughest tasks on Wednesday: convincing investors that the Detroit carmaker can overtake Elon Musk and Tesla in the electric car space. Even as global markets have fallen on the back of a new coronavirus outbreak, Tesla’s valuation is still higher than that of GENERAL Motors and most other traditional automakers.
Tesla’s market value hovered around $144 billion on Tuesday, more than three times GM’s $45 billion market capitalisation.
GM is by far the largest carmaker, with more cash and profits. But Tesla is a leader in the electric car market.
Last year, Tesla sold 367,500 electric cars worldwide, including 223,000 in the United States. GM sold only 164,000 Chevrolet Bolt electric cars to U.S. buyers in the U.S. and 60,000 Baojun E-Series models in China with its partner SAIC.
GM CEO Mary Barra and Ceo Mark Reuss have accelerated the development of electric vehicles over the past three years, focusing on proprietary batteries, low-cost flexible car designs and blueprints for mass production, mainly in China.
The company has gradually unveiled its electric vehicle strategy, announcing that the Hummer brand will be reborn as an electric pickup truck and, in partnership with South Korean battery maker LG Chemical, to build a $2.3 billion battery plant near a closed General Motors plant in Lodstown, Ohio. GM is trying to appeal to investors with a broader perspective.
GM has said its goal is to reduce the maximum cost of batteries, an electric car, to less than $100 per kilowatt hour. This, in turn, could reduce battery pack costs for electric cars such as the Chevrolet Bolt EV by as much as 45 percent, experts say.
GM has also partnered with LG Chem and Japan’s Honda Motor Co. to develop an advanced battery that is smaller, faster to charge and provides more energy than current electric vehicles.
Musk told investors that Tesla had a breakthrough in battery costs and battery life, and that it would set out on Battery Day in April.
Mr Barra has said GM plans to spend more on electric vehicles over fuel vehicles over the next five years. But as the electric car market evolves, the company has yet to say how much it will spend to compete with traditional rivals such as Tesla and Volkswagen or Ford.
Mr Barra has promised that GM will make money from electric vehicles by 2021.