Tesla a Threat to GM?

Tue, 7/31/2018 - 9:13 pm by Kirsten Rincon


Tesla has been regarded as a small, albeit innovative company ever since it was founded in 2003, that didn’t have the potential to become a serious threat to the larger companies that have already established themselves in the global market. The reason why the major American car makers haven’t taken Tesla too seriously is that this electric vehicle manufacturer has had a lot of financial difficulties and was having trouble hitting production targets, which has hurt its reputation quite a bit. Tesla’s business model, which is quite unusual for an automotive company, along with the fact that they sell expensive, luxury vehicles in a time when the economy is in a major crisis, are additional reasons why their competitors have felt comfortable and not the least bit threatened.

However, with the latest news regarding the surge of Tesla shares, and the fact that they have been able to produce cars in higher volumes, has made the American “Big Three” start looking at Tesla a bit differently and thinking about the huge potential that this company has. That’s what led General Motors vice chairman, Steve Girsky to say that “history is littered with big companies that ignored innovation that was coming their way because you didn’t know where you could be disrupted.” This basically means that GM are taking a different approach, being more careful and paying more attention to the new players in the market, such as Tesla, that are developing more efficient vehicles with sophisticated, innovative technologies.

This is why General Motors chief executive, Dan Akerson, has assembled a team that is supposed to study Tesla Motors, their business model, and whether they have the potential to affect GM’s position in the market in any way. This new approach may help GM stay ahead of their rivals, and it’s important that it’s happening in a time when they are trying to get back on track after the huge crisis that hit the automotive industry a couple of years ago. They hope to do it by creating new, better products, which basically means more affordable, more fuel-efficient vehicles, and the results of their efforts can already be seen, as their sales figures have been constantly rising during the past couple of months.

General Motors have been focused on developing an efficient electric vehicle, that will be a more affordable alternative to Tesla’s Model S. It’s the Chevrolet Volt, that sells quite well right now, but Model S sales have been pretty good, too, although it’s quite expensive and not a lot of people can afford to buy it. What this means is that General Motors are going to invest more in research and development, since they have realized that they have to offer consumers more innovative solutions, in terms of efficiency, performance, and in-car connectivity.

The fact that General Motors, a company with a 104-year tradition, has started to feel threatened by a 10-year old company, is a clear indication that Tesla has a bright future and all major car makers should be aware of the huge potential of this innovative electric car manufacturer.