Interesting idea as to why Chevy has advantage over Tesla

[robot]

I came across this article in my daily search for new Bolt EV information to share on the Bolt Forum

Business Insider makes an interesting argument that GM may not sell as many electric vehicles as Tesla will with the Model 3 (which we really won't know until we get to late 2016 and see what the demand is like for the Bolt). Regardless, however, GM doesn't need to make money on the Bolt, but Tesla definitely can't take a loss, or even a small profit on every Model 3 they sell.

So let's say that Tesla manages to book sales on something like 300,000 Model 3's by 2018-2019, by delivering them all to customers. If Tesla can make $5,000 a vehicle, higher than what is typical for midsize sedans, then the company will make about $1.5 billion.

Tesla really needs to do better than this. Its cash burn is now something on the order of $400 million a quarter, according to The Wall Street Journal, and with $1.2 billion in cash on the balance sheet as of the fourth quarter of 2015, it can't sustain that burn rate for an entire year.

The Model 3 preorder (those 300,000 bookings all come with a $1,000 deposit for a total of about $300 million raised so far), however, will buy it an extra quarter, at that rate.

The article goes on to say that GM doesn't have to worry about any of that - they'll continue making money on SUVs and trucks, and they currently have $23 billion in cash on their balance sheets - in essence, they can afford to not make much on EVs for a lot longer than Tesla.

And while the Model 3 may capture the largest chunk of the affordable-electric-vehicle market, Chevy isn't going to sell zero Bolts

That's for sure!

Furthermore, GM can deeply discount the Bolt if it wants to. And GM can much more easily manufacture the Bolt as scale worldwide, given its well-established European and Chinese businesses.

Full article here: http://www.businessinsider.com/the-chevy-bolt-advantage-tesla-model-3-2016-4

 

[Zoomit]

You could say that Tesla is "under the gun" to produce a knock-out car. As the article implies, if they don't, it's all over. GM doesn't need to push the boundaries as far, which is evident in their approach with the Bolt, vis-a-vis the Model 3.

 

[gmvoltguy]

I think an often un-spoken hesitation with Tesla is reliability. On the one hand, they've been really reliable vehicles but when you start hearing about gear-box noises and preventative replacements it gets a little suspicious. Put on top of that a Tesla service center may be an hour plus from where you live, and if they have a backlog of 100,000+ orders, how many parts will they have on hand?

Compare to GM who has service centers across the world and the ability to ramp up production/parts stores quickly, it's different.

I think there really are 2 different markets that they are targeting. There's the early adopters, people making a tech-statement with the Model 3 (and some of those will drive a Bolt for 1,2, maybe 3 years before they get their 3) and then there are the cost-saving, more utilitarian buyers who want reliability, service, etc they know and expect from a long-time company like GM.