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Dan Akerson
GM wants to take on Tesla with both luxury and affordable EVs

Tesla Motors is the underdog that went from being just another electric vehicle startup to racking up profit and car sales while paying off government loans years ahead of time. These feats have drawn the company a lot of attention recently -- especially from competitors

General Motors Co. Chairman and CEO Dan Akerson said GM will target Tesla specifically with new EV offerings from Cadillac. GM is hoping to grab some of Tesla's audience with flashy new Cadillacs that also outperform Tesla's models. 

“If you want to compete head-to-head with Tesla, and we ultimately will, you want to do it with a Cadillac,” said Akerson. “But I do think when the (Cadillac) ELR comes out late this year, early next — it’s certainly in the same postal code as Tesla, but now we’re going to move up. It’s not going to be a mass-produced car.”

Last week, GM's VP of global product development Doug Parks said the company is planning a $30,000, 200-mile range electric car. Akerson said this will likely take on Tesla. 
 
Tesla said it's working on an affordable EV of its own. In May, Tesla CEO Elon Musk said that his company's Model S is a great EV, but it's a luxury car that is out of the price range of many consumers. Musk said the ideal affordable Tesla EV would be available in about three to four years, and would be sold for under $40,000. It would also have a range of about 200 miles per charge. 

Akerson even managed to slide a little jab at Tesla's Model S when talking about the Chevrolet Volt. 

“We’ll sell more (Chevrolet) Volts and lose less money on the Volts than they’ll lose on the (Tesla) Model S,” said Akerson. 

While GM sees that there is clearly demand for Tesla's product and wants to create something similar (but better) to tap into that audience, Akerson believes problems like range anxiety still prevent EVs from really taking off in the American auto market.

“I’m not convinced that an all-electric car is the panacea that I think the American public wants," said Akerson. “What we see on the line of sight is a 200-mile battery car, but at the same time 200 miles is great, but it’s not going to satisfy the range anxiety that persists. It’s still a major issue with the purchasing public and I think you’ve got to have a generator on board so that you basically have unlimited range.”

However, GM is still interested in following Tesla's footsteps as Akerson recently created a GM team to specifically study Tesla. 

Tesla has raked in many successes this year, such as a surprise profit in Q2 2013; ramped up Model S production 25 percent to almost 500 vehicles per week (it expects to sell 21,000 Model S' worldwide for the whole year); paid off its $465 million U.S. Department of Energy (DOE) loan nine years early; snagged the highest safety rating from NHTSA for the Model S, and unveiled several new technologies like the $60-$80, 90-second battery swap feature in the Model S. 

Musk has proved to be an unstoppable CEO that will do anything to take his company to new levels. He's currently considering taking a dealership fight to the federal level because states like Texas refuse to allow Tesla to sell its cars via its own company-ran dealerships. 

Source: The Detroit News



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Is Tesla really losing money on the S
By othercents on 9/23/2013 12:11:39 PM , Rating: 2
quote:
“We’ll sell more (Chevrolet) Volts and lose less money on the Volts than they’ll lose on the (Tesla) Model S,” said Akerson.


My understanding is that Tesla is making a profit on their Model S. In reality is that GM is using their other vehicle sales to prop up the volt which no one would buy if they sold it at cost.




RE: Is Tesla really losing money on the S
By Reclaimer77 on 9/23/2013 12:56:36 PM , Rating: 5
Tesla traditionally uses more - shall we say - creative accounting practices. Musk is so far ahead of everyone, even his math is advanced apparently...


RE: Is Tesla really losing money on the S
By CharonPDX on 9/23/2013 1:22:30 PM , Rating: 2
If Tesla as a company is profitable, and their only product is the Model S, then they're making money on the S.

Not advanced math, simple math.


RE: Is Tesla really losing money on the S
By Keeir on 9/23/2013 2:13:05 PM , Rating: 4
I think Reclaimer was refering to the differences in Accounting practices.

There is a set of baseline accounting rules called "GAAP", generally accepted accounting principles. These already allow some creative accounting to reduce/push out losses, not account for future debts incurred now, etc. Tesla's "profitable" quarters have not been profitable following GAAP. Its best to say that many days currently Tesla marginally makes a profit (its daily income in higher than its daily output), but overall Tesla as a company still incurrs more long term debts that credits quarterly. Let alone historically.


RE: Is Tesla really losing money on the S
By Shig on 9/23/2013 4:12:23 PM , Rating: 3
Musk takes a lot of flak from Wall Street because all of his previous companies he sold them tech boom style. They weren't super profitable yet, but he sold them at the very top. This is why there is still a lot of shorting in the stock. Right now Tesla has such a high valuation, even a large car company couldn't just buy it outright, it would be have to be some kind of merger.

No one really knows what's going to happen because Elon Musk is doing things no one has done before. That's why it's so exciting.

The Tesla brand is already at the level of BMW, Mercedes, and Audi. It's a world brand.


RE: Is Tesla really losing money on the S
By Reclaimer77 on 9/23/2013 5:55:35 PM , Rating: 1
quote:
Elon Musk is doing things no one has done before.


Like...making a car?

Seriously the god-like status some people bequeath onto Musk is a never-ending source of amusement.

quote:
The Tesla brand is already at the level of BMW, Mercedes, and Audi. It's a world brand.


LMAO that is such complete and utter BS!


RE: Is Tesla really losing money on the S
By BRB29 on 9/24/2013 9:09:00 AM , Rating: 2
quote:
Like...making a car? Seriously the god-like status some people bequeath onto Musk is a never-ending source of amusement.


No, he's not just making a car. Tesla is the only company pushing the infrastructure for the EV market and the future of transportation. Musk is Tesla. There's only a handful of people in the past century that can claim that.

He is no God by any means. He is like the modern day version of Tesla or Edison. Whether people like it or not, our future is impacted by his decisions. He is not doing anything no one has ever done before, he is just doing something very few people can achieve while still being so young. That is why Musk is impressive. The crazy thing is that the guy is pretty humble and really cares about his employees. I won't call him god but I will give respect where it's due.


By Reclaimer77 on 9/24/2013 1:58:42 PM , Rating: 2
quote:
He is no God by any means. He is like the modern day version of Tesla or Edison.


Tesla and Edison are rolling in their graves at this. Are you serious??

Edison and Tesla expanded our knowledge. Without Edison who knows where we would even be today! He made so much possible, show him more respect!!

Tesla is just making a car. Hello??? There's nothing pioneering or revolutionary here. It's NOT changing our lives for the better. Future generations are not going to owe their standard of living to Elon Musk.


By Mint on 9/24/2013 9:40:25 AM , Rating: 2
quote:
Like...making a car?
Who else is making any luxury EV, let alone one that is priced inline with gas competitors with a free charging network? Who else is shipping supplies to the international space station?
quote:
LMAO that is such complete and utter BS!
They're outselling the 7-series, S class, and A8.


By troysavary on 9/25/2013 3:24:14 PM , Rating: 2
I actually saw someone on Engadget say that Tony Stark was modeled after Musk.


By sorry dog on 9/23/2013 4:21:46 PM , Rating: 2
quote:
If Tesla as a company is profitable, and their only product is the Model S, then they're making money on the S. Not advanced math, simple math.


I hear Blackberry is hiring accountants and would like to talk you to about being profitable... it's simple math after all.


By BRB29 on 9/24/2013 9:01:51 AM , Rating: 2
It's just Zero Emission Credits. They are worth a lot and they sell them to help the bottom line. This is why you see their stock swing wildly with news about ZE credits demand and price.

To be fair, Musk is very good with a lot of things and one of them is management. I've never seen someone can manage supply and operations that good. If there was anybody that can use Six Sigma to the fullest, it is him. That little 5-20% increase in efficiency is making a difference in production numbers and time. Combined that with free ZE credits from Cali and you got a profitable quarter from selling at a loss.


By BRB29 on 9/24/2013 8:56:13 AM , Rating: 2
Tesla didn't make a profit on the Model S. They are profitable because of Zero Emission credits.
However, to be fair, Tesla is doing much better than GM. GM conveniently forgot to mention the billions they needed to make the Volt and it is nowhere near the success of the Model S.

If they compare overall costs, which they won't mention and will never release accurate numbers, I'm willing to bet The Model S will end up with a lower cost per unit than the Volt.


By SAN-Man on 9/23/2013 12:20:48 PM , Rating: 5
Telsa is currently outselling 7 series and S-Class.

Direct sales cut out the middle man but that's not the real issue. GM and other car companies are fighting the direct sales model simply to keep Telsa from creating a market.

And no, GM and other companies do NOT have an EV in the same class as the Telsa.

This is plain and simple.


By GulWestfale on 9/23/2013 12:53:59 PM , Rating: 3
that is simply not true. perhaps you mean tesla is outselling certain models in california, but certainly not across the US or throughout the world.
for example, i have read that tesla is outselling audi's A4 right now, but only in california. tesla sold just over 1000 vehicles in the moth of june, that's not exactly enough to compete with an established carmaker. nonetheless, they are certainly making an impact, and it's enough to make others notice them. that is why daimler and toyota have invested in them, after all.

i am however surprised that tesla has made it this far. you hear about one boutique carmaker or another every week, and sticking a different drivetrain and a couple of badges on a lotus elise is what a lot of them do, before they are never from again.

so i must say, kudos to tesla. i never thought they'd come this far. i just recently saw my first model S out on the road (well, in a parking lot) here in montreal, and i have to say it looks quite good.


By Flunk on 9/23/2013 1:48:44 PM , Rating: 2
It's easy to find examples when you cherry pick so aggressively. the 7-series is a very low-volume model, as if the S-Class and they're both priced significantly higher than the Tesla Model S too.

I could just as easily say that the Honda Civic massively outsells the Tesla model S. Which is just as true, but equally as pointless a comparison.


By Flunk on 9/23/2013 1:49:30 PM , Rating: 2
Come back when the Tesla Model S outsells the BMW 5-series across the entire country, that would be really impressive.


By DT_Reader on 9/23/2013 4:04:09 PM , Rating: 2
That will happen, when the Tesla is allowed to be sold across the entire country. Until then it's only fair to compare Tesla sales in states where they're allowed to sell.


By Flunk on 9/23/2013 4:45:53 PM , Rating: 2
You're implying that people are incapable of buying vehicles out of state, which doesn't make sense. Take a look at Texas for example. There are plenty of Teslas on the road there and yet they can't be sold in Texas.

You're not reader1, are you?


By ilt24 on 9/23/2013 12:37:27 PM , Rating: 2
I don't think it's the car manufactures going after the Telsa. I'm pretty sure it's the car dealership national automotive dealers associations and some state associations who have been trying to get them to franchise.


By FITCamaro on 9/23/2013 12:38:48 PM , Rating: 2
No they're fighting them because they want Tesla to follow the same rules that they have to.


Hey GM - dream on
By Dr of crap on 9/23/2013 12:29:01 PM , Rating: 2
"“If you want to compete head-to-head with Tesla, and we ultimately will, ...
Yea right- and what kind of coffee is he drinking??

"Last week, GM's VP of global product development Doug Parks said the company is planning a $30,000...
"
A Cadillac is the luxury division of GM.
So how will it be received - a Caddy for only $30k and an EV ??

And then The GM head goes on to state that EVs are not going to sell well to the public because of range problems! But go ahead and TRY and compete with Tesla in a field you don't see as a big sales!!!????




RE: Hey GM - dream on
By othercents on 9/23/2013 12:35:23 PM , Rating: 2
Cadillac ELR is built on the Volt chassis. Which means plug-in hybrid and only a 4 seater. Not only that it is only 2 door vehicle instead of the larger S.


RE: Hey GM - dream on
By GulWestfale on 9/23/2013 12:58:13 PM , Rating: 4
maybe they can call it the cimarron II.


RE: Hey GM - dream on
By DT_Reader on 9/23/2013 4:11:20 PM , Rating: 2
Exactly! It's just a re-badged Volt, which means it does not compete with the Tesla at all.

This is typical GM thinking. Remember the Vega, and how it was going to crush Toyota and Datsun? Or the Chevette? Cavalier? Cobalt? Over 40 years and GM still can't build a decent small car - how long do you think it will take them to make a decent electric? 20 years? 30? 40?


RE: Hey GM - dream on
By foxalopex on 9/24/2013 1:37:54 PM , Rating: 2
Actually the Volt is a very nice car. I own one. It's not anything like an econobox and more like a low end luxury car. Still, having said that it's definitely not a Telsa S. The ELR will basically be the tweaked Volt platform. From the drawings and designs it looks like a very very nice car. The ELR will basically have a very expensive interior and design. It likely won't match the Telsa S in performance but then again the Telsa S can't be driven anywhere non-stop. (Canada for example has no superchargers and likely never will.)

GM has their Spark EV which is based on the Volt platform. It isn't available nation wide yet but it's as cheap as a Leaf and from everything I've read an incredibly quick little car.

And as nice as superchargers are, I am afraid they can't quite beat fueling your car in a few minutes. I took my Volt cross country across Canada this summer, that's something you can't do with a Telsa S. Especially if you're going non-stop. In the summer at home, the Volt has enough range for all my daily travels on battery. Oh, and the Volt is half the cost of the Telsa S. I could buy 2 Volt's for that price.


RE: Hey GM - dream on
By flyingpants1 on 9/23/2013 3:11:37 PM , Rating: 5
If GM made a $30k 200-mile EV, it would obsolete all their other cars in one go.

And it wouldn't matter because as they said themselves, people would still have range anxiety because there is no national recharging network. Meanwhile Elon is making a cross-country trip this year in a Model S using his superchargers.

Gotta hand it to Elon, he basically did it single-handedly. $30k EVs are just inevitable now. Nobody could have predicted that 5-10 years ago.


RE: Hey GM - dream on
By foxalopex on 9/24/2013 1:57:00 PM , Rating: 2
The thing is Superchargers still take some time to charge your vehicle and they won't account for situations where there isn't a supercharger available. Such as in Canada or in nearly any place in the world.

Elon's biggest accomplishment is kick starting the automotive industry towards EVs. If you watch Revenge of the Electric Car, they point out Bob Lutz had actually wanted an EV car again after the technology finally caught up (thanks to the widespread use of Lithium Batteries.) The problem was most publicly traded companies are bean counters and unwilling to take the risk until some small company proved it could be done.


Yeah, Right
By mgilbert on 9/23/2013 12:51:39 PM , Rating: 1
Cadillac makes some of the cheapest, most unreliable - and most overpriced - garbage on the road. The idea that they could ever compete with Tesla is just plain laughable! They can't even compete with Toyota, or Ford for that matter.




RE: Yeah, Right
By m51 on 9/24/2013 10:13:31 AM , Rating: 2
I went to a Cadillac dealership some years ago, got in the driver seat of a brand new STS. Went to pull the door shut and the whole door panel came off in my hand.

After decades of these kinds of issues GM has carved out a reputation just barely above some of those eastern European car makers.


Wow
By flyingpants1 on 9/23/2013 2:48:48 PM , Rating: 3
Called it.




New GM
By TETRONG on 9/24/2013 12:02:39 AM , Rating: 1
Next time you're able to bend Dan's ear can you ask him why any American should ever believe a word he, or any other "New GM" exec utters..?

BTW, it's not right to refer to them as "GM" when that company and all of it's obligations were forcefully buried. The correct name is "New GM".

I had several thousand shares in GM that went up in flames when they declared bankruptcy..all while they were selling Buicks in China at record rates, and after they had just come off two decades of selling high profit SUV's/Trucks.
Suddenly, they had a slight dip in their sales and needed taxpayer injections just to stay afloat. What about all of the money they just made and were continuing to make in new markets at that time?

Really disgusting behavior if you ask me and their continued clueless decision making is going to lead them write back to the bread-line begging for more.

Just looked at their share price @ $37.00 do you have any idea how much money I'd have if they hadn't been allowed to screw over everybody that made them who they are?

Fuck New GM!
Done with this company forever and wouldn't even piss on one of their cars - American my ass!





RE: New GM
By troysavary on 9/25/2013 3:33:22 PM , Rating: 2
GM was losing money because of massive healthcare payments to retired GM employees, unions rules that had them paying people to stay home when they idled factories, etc. If they were allowed to restructure under normal bankruptcy procedures and get rid of the unions at the same time, instead of the government stepping in and rewarding the very unions that were the heart of the issue by giving them partial ownership while screwing the investors who are, by law, supposed to be paid first, it would have been a different story.

I can't blame GM for taking that option, as the government practically forced it on them. Put the blame where it belongs, with the US government for illegally seizing the shares from the rightful shareholders.


"We'll lose less"?
By CharonPDX on 9/23/2013 1:21:40 PM , Rating: 2
quote:
We’ll sell more (Chevrolet) Volts and lose less money on the Volts than they’ll lose on the (Tesla) Model S.


Um... So you admit that the Volt loses you money.

Yet Tesla is profitable. If Tesla is profitable, and their only product is the Model S, then the Model S is profitable, not a money loser.




Who's the underdog?
By m51 on 9/24/2013 9:57:17 AM , Rating: 2
Considering GM's history it seems like GM should be considered the undedog.




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