The nascent market for long-range all-electric cars is often viewed a zero-sum game, prompting headlines heralding the latest electric-vehicle unveilings as "Tesla-Killers." But Tesla (NASDAQ:TSLA) CEO Elon Musk seems to disagree with the notion that new electric vehicles threaten Tesla's prospects. Indeed, during a question-and-answer session with shareholders earlier this month, Musk expressed concern about the timidity of other automakers' plans for electric vehicles, even going as far as to say General Motors (NYSE:GM) isn't fully taking advantage of the opportunity its new electric Chevrolet Bolt is presenting the company.
Musk to competition: Why are you so slow?
When asked in a Nov. 17 shareholder meeting about what Musk thinks of increasing competition, particularly GM's new Bolt, which boasts 238 miles of range and a much-more-affordable-than-Model S price tag of $37,000, and the just-unveiled Jaguar I-Pace, Musk said the new vehicles are encouraging. However, he expressed concerns about car makers' underwhelming ambitions for the underlying programs supporting these vehicles.
I am a little concerned about the pace and volume of what they're doing since they seem to be mostly aiming mostly to just target whatever the incentive threshold is, and then not really do serious volume beyond that. ... The major manufacturers are not, from what we see -- maybe with the exception of what Volkswagen says they're going to do -- none of the competitors are planning to do serious volume in electric vehicles yet. They're just sized to stay within the volume constraints of the incentives.
Musk went on to specifically note that GM is reportedly only targeting production of 20,000 to 30,000 units a year for its all-electric Bolt. This program is far too conservative Musk suggested: "But really a car like that should be 300,000 to 500,000 per year for it to really make a difference."
Musk may have been referencing a combination of reports, including one from Reuters in 2015 stating GM was targeting around 25,000 to 30,000 deliveries in 2017 and a statement earlier this year at HybridCars by GM's manager of electrification, Kevin Kelly, saying the company could meet demand for up to 50,000 units for first-year sales. Whether GM is aiming for 25,000 to 30,000 deliveries or 50,000, both would fall far short of what Musk thinks the Detroit-based automaker should be targeting.
Recent commentary on GM's plans for the Bolt continue to suggest the company will be rolling out its fully electric vehicle program slow -- at least for now. While the Chevrolet Bolt is scheduled to begin shipping to customers before the end of the year, initial availability will be very limited, according to The Wall Street Journal.
"General Motors Co.'s first long-range electric car won't be made widely available for several months," wrote WSJ's Adrienne Roberts, "with the auto maker planning to sell the Chevrolet Bolt in California and Oregon in coming weeks to meet its commitment to put it on sale in 2016."
Even more, the Bolt will only be offered "in limited quantities in 2017," Roberts said, citing GM spokeswoman Michelle Malcho.
Tesla is betting on a big market for EVs
Tesla's production plans for its first more affordable electric vehicle, Model 3, contrast with GM's. Priced at $35,000 and slated to begin delivering to customers toward the end of next year, Tesla plans to deliver Model 3 in volume before 2017 is over. Further, Tesla expects rapidly increasing Model 3 production to help annual production soar from a projected 80,000 units this year to 500,000 in 2018. In other words, Tesla is likely anticipating Model 3 deliveries to be in the hundreds of thousands in the vehicle's first twelve months of availability.
And Tesla isn't taking a shot in the dark when it comes to estimating demand, the company easily garnered over 370,000 deposit-backed reservations for the vehicle in under two months of its March unveiling -- all without any advertising or any significant social media efforts. So, it's easy to see why Musk is so bullish on the segment.
As is evident by both Tesla's ambitious production plans and his apparent disappointment in competition's ability to bring to market compelling electric vehicles backed by big production plans, Musk clearly has a different idea of how rapidly the market for electric vehicles is about to grow as the first affordable battery-powered vehicles with over 200 miles of range hit the market.