Even as global markets reel from coronavirus fears, Tesla's
valuation is outpacing that of GM and most other legacy
automakers. On Tuesday, Tesla's market cap hovered around $144
billion, more than three times GM's $45 billion.
GM is by far the larger manufacturer by volume, and generates
more cash and profits. But in the electric vehicle market, Tesla
is the leader.
Last year, Tesla sold 367,500 electric vehicles globally,
including 223,000 in the United States. GM sold just 16,400
Chevrolet Bolt EVs to U.S. buyers, and 60,000 Baojun E-Series
models in China with joint venture partner SAIC Motor
<600104.SS>.
GM Chief Executive Officer Mary Barra and President Mark Reuss
have ramped up electric vehicle development over the past three
years, focusing on a proprietary battery, a low-cost flexible
vehicle design and a blueprint for high-volume production,
mainly in China.
The company has revealed its electric vehicle strategy in
incremental steps - announcing the Hummer brand will be reborn
as an electric pickup and partnering with Korean battery maker
LG Chem <051910.KS> to build a $2.3 billion battery plant near a
shuttered GM car plant in Lordstown, Ohio. GM is now trying to
put the broader picture into focus for investors.
GM has said it aims to reduce the cost of battery cells - the
single greatest expense in electric vehicles - to less than $100
per kilowatt-hour. That in turn could slash the cost of battery
packs for electric vehicles like the Chevrolet Bolt EV by up to
45%, experts say.
GM is also developing an advanced battery, in partnership with
LG Chem and Japan's Honda Motor Co <7267.T>, that will be
smaller than current EV batteries, can be charged more quickly
and will provide more energy.
Musk has told investors that Tesla has battery cost and range
breakthroughs in the works that it will describe at a "Battery
Day" in April.
Barra has said GM plans to spend more on electric vehicles than
on gasoline-powered cars over the next five years. But it has
not put a figure on how much it will invest in its efforts to
rival Tesla and traditional competitors such as Volkswagen AG <VOWG_p.DE>
or Ford Motor Co<F.N> as the electric vehicle market develops.
Barra has, however, promised that GM will make money on electric
cars by 2021.
(Reporting by Paul Lienert in Detroit; Editing by Dan Grebler)
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