General Motors' made a splash at the Las Vegas Consumer Electronics Show this week with the unveiling of the pre-production version of its fully electric Chevrolet Bolt. The vehicle sets a new standard for affordability of fully electric cars that have more than 200 miles of range.
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Chevy Bolt. Image source: General Motors.
But is the company's bet on the Bolt too conservative?
For those who missed the news, here are some of the key features of General Motors' boldest bet yet in the EV space.
- The bolt will sport "more than 200 miles or range per charge," according to a description of the vehicle on the company's website.
- It has a starting price of $37,500.
- The vehicle will begin shipping in late 2016.
- The Bolt will have a zero-to-sixty time of "under 7 seconds."
Overall, the vehicle arguably offers the best value to date for fully electric vehicles at an affordable price point. And it's a smart move. The Bolt positions GM to take advantage of growing sales of fully electric vehicles with meaningful range while also establishing a foundation for more electric models in the future.
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GM's unveiling of the pre-production version of the Bolt highlighted the company's bigger vision for electric vehicles. And the vision arguably lacked the ambition you would expect from one of the world's most valuable automakers.
GM North American executive vice president Alan Batey "played down expectations for large sales volumes with the Bolt," noted WSJ's Gautham Nagesh. The company simply "sees the car as a way to reintroduce the brand to consumers that haven't interacted with it in some time," Nagesh said.
Indeed, Batey even seemed to suggest that the primary reason for the vehicle's development could simply be to comply with regulations.
"There are certain states in the U.S. where you need to sell electric vehicles if you're going to be able to sell your total portfolio," Batey said. "As part of that, we have a need to have a range of electric vehicles."
The conservatism toward the vehicle, however, isn't surprising. The company sold just 15,400 units of its plug-in hybrid Chevy Volt in 2015. Despite its reasonable starting price of $35,000, this figure was far below sales of Tesla's Model S, which are priced between $70,000 and $145,000. Tesla sold more than 50,000 units of its Model S during 2015.
Model S. Image source: Tesla Motors.
With the styling and performance of the Bolt arguably lagging comparably priced gas cars starting around $37,500, GM's conservative aspirations for the vehicle make sense. Further, Tesla plans to release a 200-plus mile range, $35,000 priced electric car, called the Model 3, by the end of 2017 -- a move that will likely put immense competitive pressure on the Bolt.
Unlike GM, Tesla has ambitious expectations for its lower-cost electric vehicle. The company plans to ramp-up production of its Model 3 to several hundred thousand vehicles per year by 2020. Of course, there's always a possibility the electric-car maker won't be able to maintain its ability to compete with comparably priced cars, as it has with the Model S, when it moves downstream to mass-market price points. In this case, Tesla could be overoptimistic about its Model 3 ambitions and GM could be spot on with its conservatism.
Investors will get a better idea of how realistic Tesla's ambitions for its Model 3 are when the company unveils a concept version of the vehicle in March. Will the Model 3 live up to Tesla's big ambitions or will the company fail to handily outdo the Bolt?
The article The Chevy Bolt Is A Smart Move -- But Is It Too Conservative? originally appeared on Fool.com.
Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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