General Motors Builds Team to Scrutinise Tesla Business Plan

General Motors builds team to scrutinise Tesla business plan
General Motors builds team to scrutinise Tesla business plan

It was only a matter of time before one of the major car companies began ripping apart the Tesla business plan to see why the company has a market cap in excess of $15 billion and is set to run away with the future electric vehicle market. Indeed there are rumours that General Motors has appointed Steve Girsky to head a "secret team", which will study why Tesla is so successful and what Elon Musk is doing that everybody else seems unable to replicate.

While this specific team which is targeting Tesla is an interesting development in the sector, and shows growing competition between car manufacturers, the fact is that the likes of the Tesla Model S will already have been ripped apart by numerous competitors to see exactly what makes it tick. This is common practice across the business environment and indeed unless you know what your competitors are doing how can you beat them?

Why is Tesla so successful?

The fact is that Tesla joined the electric vehicle industry as a "clean" operation, with no baggage, and a clean slate from which to build luxury electric vehicles. Unlike some other manufacturers who continue to roll out millions upon millions of traditional vehicles, Tesla was very specific in its initial target market and once this particular market was "cracked" the company then began to look elsewhere. All of the time Tesla was well aware that the electric vehicle today is viewed more from a technological viewpoint by users as opposed to how you would do a traditional car. This is a very distinct difference between the various strategies across the car manufacturing industry.

Quote from ElectricForum.com : "As an owner of a 2013 Volt I would be happy to answer any questions (as best I can) about the Volt, how it operates and my experience with it."

Be proud of your electric vehicle

In years gone by some of the electric vehicles which actually made it to production were hideous in style and for many people they were somewhat embarrassing to drive. Tesla changed this overnight with the creation of the likes of the Tesla Model S, rated by many as the best electric vehicle ever, which is actually a pleasure to drive and a pleasure to own. This is why the company seems to be able to connect with its target market to a greater extent than its competitors - as well as the fact that it listens as opposed to dictates to potential customers.

Planning ahead

When Elon Musk suggested that battery prices would fall from $500 per kilowatt hour to around $200 per kilowatt hour he was ridiculed by many. However more and more people in the automobile industry are coming around to the idea that batteries are "exponential technology", much as the microchip remains so today. Due to reduced costs, improved storage, and longer life with every full charge, battery cost per kilowatt hour is reducing by around 8% per annum. This is set to continue for the foreseeable future and allows companies such as Tesla to take the lead in designing vehicles for the future which will take into account future battery capacity.

Conclusion

It is debatable whether the likes of General Motors will be able to replicate the Tesla business model because in many ways these companies look at the electric vehicle industry through very different eyes. Tesla has often moved away from the traditional electric vehicle manufacturing crowd to "do its own thing" and then re-emerged often light years ahead of its competitors. It will be interesting to see whether General Motors does adopt any of the Tesla specific business ideals and whether indeed it can stop the enormous momentum building behind Tesla.