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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.


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