Why Tesla Motors Investors Should Worry About GM's Plans for the Chevy Bolt

GM CEO Mary Barra unveiled the Chevrolet Bolt, a possible future electric car, in Detroit last month. A report this week said that GM will put the Bolt into production late next year. Source: General Motors Company. 

Last month, General Motors (GM +0.00%) surprised us by revealing the all-electric Chevy Bolt, a small car with, it said, a 200-mile range -- and a price tag of around $30,000.

Officially, the Bolt was just a "concept," an idea that might or might not go to production. But those of us who have watched the auto industry for a while know that there are "concepts" that are just flights of designer fancy -- and then there are "concepts" that are thinly disguised looks at future production cars.

I was there when the Bolt was unveiled, and it looked to me like something GM had plans to build. That idea picked up a lot of steam this week with a Reuters report saying that the Bolt will go into production at a GM factory in Michigan in 2016.

If that report is true, it's not good news for Tesla Motors (TSLA 0.01%) -- but not for the reasons you might think.

GM's expectations for the Bolt are not what you think they are
Tesla CEO Elon Musk certainly didn't seem threatened by the Bolt's unveiling when he spoke in Detroit last month. In his view, all cars will soon be electric cars, and if anything, he seemed pleased to see GM getting with the program.

But that's the problem. If the Reuters report is true, Musk's vision might be wildly optimistic, or at least premature. Here's why: GM is only planning to produce 25,000 to 30,000 Bolts a year, according to the report.

If there's huge pent-up consumer demand for an affordable electric car with good range, one would think that GM would be in a position to jump on it. A late-2016 production start would put the Bolt on sale before Tesla's long-promised "affordable" Model 3, and possibly before the next-generation version of Nissan's Leaf.

So, is GM being stupid here? Is the company missing a huge opportunity? I don't think so. I think GM is being realistic about consumer demand for electric cars -- and I think Tesla investors need to think about this carefully.

Consumers aren't exactly eager to adopt electric cars
 For all of the hype around electric cars, their sales haven't grown all that much in the last several years.

Consider: In 2008, there were 12 "electrified vehicles" -- hybrids, plug-ins, and battery-electric cars -- offered in the U.S. market. Together, they had 2.3% share of overall U.S. sales. 

Last year, there were almost 60 electrified vehicles on the U.S. market, and they accounted for 3.3% of industry sales.

On the one hand, that's good growth. On the other hand, it's still not very many cars.

It's about 550,000 vehicles, out of roughly 16.5 million sold in the U.S. last year. And the vast majority of those "electrified vehicles" were conventional hybrids like Toyota's Prius. InsideEVs says that only about 120,000 "plug-ins" -- plug-in hybrids and battery-electric cars -- were sold in the U.S. last year, and about 320,000 worldwide.

But the bull case for Tesla's stock requires the company to be selling 500,000 premium-priced battery-electric cars a year by 2020, just five years from now.

Where are those customers going to come from?

Tesla investors need to be thinking about this
To be very clear, I'm not faulting Tesla here. The company has executed very well so far, it builds a fine product, and its customers are happy. 

But so far, I'm not seeing much in terms of market trends to support Tesla investors' growth expectations. Apparently, General Motors -- which was a pioneer in electric-car development, and dearly wants to be a leader in this space -- isn't seeing much, either. 

What are we missing? Scroll down to leave a comment with your thoughts.