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GM\'s Chevy Bolt Is Not Serious Competition For Tesla\'s Model 3

by:HGB     2020-03-07
GM\'s commendable Chevrolet Bolt is clearly a great car and a step forward for electric cars.
However, the hype around Chevrolet Bolt is a bit out of control.
Some see this as a serious competitor to the upcoming Tesla Model 3.
Bloomberg, for example, said it could be a \"Tesla killer \".
\"These assessments ignore the significant differences between the two vehicles, particularly the huge advantages of Model 3 in charging, aesthetics and advanced driving assistance systems (ADAS) technology.
On top of that, Chevrolet Bolt is $2,500 more expensive than Model 3.
Finally, GM plans to produce only 30,000 Chevrolet Bolts a year, while Tesla plans to produce 400,000 each year.
Chevrolet Bolt (left) and Tesla Model 3 (right ).
This is significant for GM and Tesla because it shows that the company still lags behind Tesla in the transition from the automotive industry to electric vehicles, although GM seems to be ahead of other competitors.
Bloomberg New Energy Finance (BNEF) predicts that electric vehicles will achieve cost parity with gasoline vehicles in 2022 when the cost of battery packs drops to $200/kWh.
Tesla has pushed its battery pack below this threshold.
This suggests that the cost advantage of Tesla electric vehicles is in sight if BNEF\'s predictions are correct.
Therefore, it is likely to depend to a large extent on how quickly automakers can transition to electric vehicle production.
GM still has a lot of work to do to catch up with Tesla, but Chevrolet Bolt marks the company taking electrified more seriously than most.
This is significant for Tesla, as it means that the only competitor to Model 3 will be a petrol vehicle.
Gasoline vehicles within the price range of Model 3 usually also have aesthetic disadvantages.
In terms of ADAS technology, all cars are at a disadvantage.
Gasoline cars also lack the acceleration, control, noise, energy costs and environmental advantages of electric vehicles.
With Model 3, Tesla is likely to launch a product that will change the industry and bring new expectations to the car.
In the first part of this article, I will compare Chevrolet Bolts and Model 3 in five aspects of price, charging, aesthetics, ADAS technology and planned production volume.
In the second part, I will explore the impact of this comparison on the competitive positioning of GM and Tesla in the transition from the automotive industry to electric vehicles.
Part 1: The basic price of Chevrolet Bolt and Model 3 is $37,500, and Chevrolet Bolt is $2,500 more expensive than Model 3, $35,000.
In the case of the same other conditions, cheaper cars are more desirable.
Model 3 has an advantage from the beginning.
In the United States, however, the two cars will initially receive a federal tax credit of $7,500.
When manufacturers sold a total of 200,000 electric vehicles, the tax credit began to be phased out.
Tesla will reach this threshold before GM, which means that at some point Bolt will be $5,000 cheaper than Model 3 in the United States. S.
Similarly, if GM sells bolts (or other electric vehicles) in a volume similar to Model 3)
Tesla plans to sell 400,000 vehicles a year
The tax credit will also be phased out.
Therefore, in the total sales competition, the tax credit does not give GM any advantage over Tesla.
For a distance of more than 238 miles, it is impractical to check the Chevrolet Bolt.
Trying to take the Chevrolet Bolt on a long trip requires \"no result in finding a charging station or waiting for the time (and time) for the car to fully charge ).
\"Not only does Bolt lack a wide three-stage charging infrastructure, but the car itself lacks hardware that charges more than 50 KW.
Driving 383 miles from San Francisco to Los Angeles, drivers have to park for about an hour to recharge.
In contrast, Tesla has a wide network of superchargers that can easily cross North America.
The supercharger charges at a maximum rate of 145 KW.
For the same road trip on the same range of cars, the driver only needs to stop for about 20 minutes.
Although most drivers rarely travel more than 238 miles a day, mileage anxiety remains their top concern for potential electric car buyers.
Tied 119-
Mile radius is not what people like, especially in North America, and long-distance driving is important due to geography, infrastructure and culture.
For example, a significant proportion of American families take car holidays every year.
Even if family cars travel more than 238 miles a year in just one day, car buyers may think it is necessary to do so --have.
Aesthetics is the most important factor in the decision-making of car buyers.
I decided to do my own research on the aesthetics of these two cars through a survey of 100 people in the United States.
Respondents chose to complete the survey through Mechanical Turkey (they paid for it), otherwise it was a random sample.
The description or investigation itself does not mention the name of the car or company.
Results: 94% of respondents said they preferred Model 3, a surprising percentage.
Which car is more beautiful for consumers? No contest.
Chevrolet Bolt only includes basic driver assistance.
On the other hand, Model 3 is equipped with advanced software functions and complete self-
Drive hardware.
While enhanced self-driving features should be available later this year, in the chart below, I only include features currently enabled on both the S and X hardware 2 versions
Another obvious advantage of Model 3\'s ADAS technology, compared to Chevrolet Bolt, is that Model 3 will receive performance updates around each month and continue to improve over time.
Chevrolet Bolts have the technical ability to receive excessivethe-
The Air update, but it seems GM intends to use the functionality to patch existing software instead of improving performance or adding new features.
Obviously, if GM produces 30,000 Chevrolet Bolts per year, Tesla produces 400,000 Model 3 s per year, then GM gets a theoretical maximum of 30,000 cars a year from Tesla or seven cars.
5% of total planned annual sales.
Tesla\'s production plan cannot be realized unless GM changes its production plan, which is the worst --
Case scenario for Tesla.
When GM is still eligible for a $7,500 federal tax credit and Tesla no longer does that, the price of the base Chevrolet Bolt will be $5,000 lower than the base model 3.
Is it worth saving $5,000 to accept an unrealistic car for long distance driving, not so aesthetically pleasing and with more basic ADAS technology?
I can\'t say for sure without market research on this issue.
However, based on the general principle of consumer behavior in the automotive market --
For example, the importance of aesthetics
I suspect more than a small number of consumers will choose Chevrolet Bolt instead of Model 3.
Bolts are good for GM but Model 3 is better for TeslaThe Chevrolet Bolts
Range, relatively low-
Electric vehicles for the mass market.
GM\'s achievements here should not be underestimated.
At present, Bolt\'s low sales have little impact on GM\'s top models, as the company sells 10 million cars a year.
However, as long as GM continues to focus on the ball and continues to iterate, Bolt is a promising sign for the company\'s future.
To attract more consumers, GM should redesign the look of the next generation of bolts.
It should also upgrade Bolt\'s charging hardware and add its Super Cruise ADAS technology.
If it is able to do this cost-effectively and build more and faster tier 3 charging infrastructure and increase production, then it can be hit with real damage.
However, some industry watchers have exaggerated GM\'s achievements in Bolt, suggesting it will be a serious competitor to Tesla\'s Model 3.
As I have shown in this post, Bolt is far behind Model 3 in terms of charging, aesthetics and ADAS technology.
The number of last bookings was 373,000, rising every week, and consumers expressed a rare enthusiasm in the automotive industry.
The story of hundreds of potential customers queuing outside the Tesla store in the rain to book Model 3 is more reminiscent of the launch of Apple (AAPL) products than cars.
Although the Bolt may be great, it is not at that level.
Potential customers line up in the rain at the Tesla store in Montreal at five o\'clock A. M. to book the Model 3.
Photograph: nitrodude.
Part 2: GM and Tesla in the electric future of CarsSource: global outlook EV 2016 report from the International Energy Agency.
The tipping point for electric carsHere is an underrated point about electric vehicles, which I will illustrate through a thought experiment.
Assuming industry standard technology A, gold can be mined at $200 an ounce.
Using Technology B, it takes $300 to mine an ounce of gold.
Therefore, B technology enjoys a high reputation as an unrealistic and expensive mining technology.
However, the cost of technology B is down by $25 a year.
Within five years, tech B costs $175 per ounce of gold, while tech A costs $200.
Technology B will cost $100 in eight years.
Suddenly, the dynamic is flipped.
Now, the cost of technology A is very low and Technology B will dominate.
This is the case with gasoline and electric cars.
According to the estimates you use, electric cars become either close to or have reached a level that is cheaper than gasoline at the same price.
Electric vehicle battery pack prices are down 13% per year on average
Tesla is much faster.
As noted above, Bloomberg New Energy Finance (BNEF) estimates that the tipping point for electric vehicles is $200/kWh.
Tony Seba, a lecturer in startup, subversion and clean energy at Stanford University, evaluated this: battery manufacturers usually keep costs secret.
Neither GM nor its battery supplier, LG Chem (OTCPK: LGCLF), disclosed the cost of its battery pack.
However, GM has angered LG Chemical by disclosing the cost of the battery --
Different from the battery pack-
Bolts in Chevrolet.
In April 2016, Tesla simply stated that its cost was \"below $190/kWh.
\"According to a promotional video released by Tesla, electronic travel writer Fred Lambert speculated that Tesla\'s battery cost could be less than $124/kWh as of February 2017.
If Lambert is correct, then Tesla is at least close to the $100/kWh threshold for Tony Seba and may have exceeded that threshold.
However, it should be emphasized that the figure has not yet been confirmed, and Lambert\'s possible conclusion is wrong.
This data shows that electric vehicle manufacturers may be at the cutting edge of cost advantage compared to gasoline vehicle competitors.
If so, the price of electric cars will exceed that of the same gasoline.
Tesla\'s battery production at Gigafactory 1 in Nevada. Source: TED.
Electric vehicles are crucial to the development of automobiles.
In the above section, I discussed the upfront cost of electric vehicles.
Another indicator will play a vital role in the coming years: Cost per mile.
The emergence of shared self-fleet
Driving a callable vehicle on demand will further accelerate the transition to an electric vehicle.
Energy costs, maintenance costs and vehicle life change from some important to manufacturing when the car is driving or charging for up to 24 hours a day-or-
Break the business model of the company.
Analyst Li Wei Tillemann-
Dick estimated that a self
The cost of driving an electric car per mile may be 80% lower than that of a gasoline peer.
This means that companies using electric vehicle fleets will be able to charge less for rides, forcing any competitor who may use petrol vehicles to switch to electric vehicles or to abandon the market.
The proportion of electric vehicles in today\'s sales is small, but their share will grow rapidly. It is this understanding of the future that has prompted me to pay so much attention to Chevrolet Bolt --
Of a company that sells 30,000 cars a year, a car that plans to sell 10 million cars a year --and on Tesla -
A company that plans to sell 500,000 cars in 2018, the industry sold 90 million cars in 2015.
In the end, electric cars will become the whole car market.
Based on the ever-decreasing cost of batteries and the Coming self
Driven by demand, the shift to this possibility will be faster than many industry watchers currently expect.
If some companies are able to achieve this shift faster than their competitors, their competitive advantage may range from considerable to devastating.
However, there is a general attitude of complacency and inertia in enterprises --as-
Typically in the automotive industry, an industry analyst believes that Ford (F) should focus on incremental improvements to gasoline pickup trucks instead of reducing the development of new technologies.
Investors should take advantage of the seriousness of automakers in terms of electricity and self-management
Try to measure the possible financial and competitive conditions in the coming years.
The result is: GM got B-
Tesla\'s electric and autonomous driving will quickly take over the automotive industry.
Selling petrol vehicles to individual drivers will become a difficult business model.
In evaluating the long term of a car manufacturer
Long-term growth prospects, the most important thing is whether the company can surf in the wave of change, or be overwhelmed by change.
For this reason, I think the presence of a car manufacturer
Its technological and competitive fundamentals are secondary.
For a long time, the former was only important in enabling the company to execute the strategy based on the latter.
Internal R & D work is often difficult to evaluate.
It is difficult to distinguish the real progress from the optical attractive progress, but kludgy demoware or direct vapourware.
This is the most effective test of progress.
And serious
It is the most ambitious product publicly released by a company.
That\'s Chevrolet Bolt for GM.
For Tesla, this is Model 3-
Or will come in a few weeks.
With Chevrolet Bolt, GM is also doing well.
I give it a B. .
The rating may seem stingy, but GM has yet to prove that Bolt is more than just a compliance vehicle.
If GM makes adjustments to meet the needs of the masses and increases production, it will be easy for me to change its grade to B or. .
The launch of Model 3 will be Tesla\'s iPhone moment.
Venture capitalist Mark Anderson recently made a comparison like this: tesla\'s growth in price, charging, aesthetics, ADAS technology, and production volume has led it in the transformation of the automotive industry to electric vehicles.
Its strong brand and loyal fan base, willing to endure early morning queues in the rain, just to book a car, it laid the foundation for Tesla\'s breakthrough success in future models such as Model 3 and Model Y.
Tesla got.
Mark Anderson recently spoke to Barry risalz.
Anderson\'s comments on Tesla begin in about 27 minutes.
A plausible scenario for Tesla is the snowball effect, in which its success on Model 3 and its own
Through its efforts, it is able to further accelerate vehicle production and finance the development of new vehicles and energy products.
This in turn generates more capital to reinvest in manufacturing and product development, thus preventing competitors from catching up and even taking the lead further.
That\'s why even if Tesla deals in a completely new way
I think this stock is a huge opportunity for growth.
My suggestion: buy TSLA and hold it for a long timeterm-basis.
Note to the author: in the previous version of this article, I incorrectly described enertution\'s arguments about Chevrolet Bolt and Model 3.
I encourage readers to read the article on enertution to understand their arguments accurately.
I apologize for this mistake.
Also, I confused the cost of the battery and the cost of the battery pack, which is different.
The article has now been corrected.
I apologize for this mistake.
Disclosure: I am/We are long TSLA.
This article was written by myself and expressed my views.
I have not received compensation (except for Seeking Alpha ).
I have no business relationship with any stock company mentioned in this article.
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