"In a few years, a long-range, affordable electric car will no longer be a novelty."

GM has beaten Tesla thanks to economies of scale


Tue, Dec 20th, 2016 09:00 by capnasty NEWS

Albeit ugly and with a cheap-looking cabin, GM's Chevy Volt is capable of delivering "200 miles on a single charge" at a relatively affordable price. Performance wise, the vehicle is a good example of what the electric cars of the (near future) will be like as combustion engines begin to be phased out. Reportedly, this may mean that Tesla, the underdog of electric vehicles, was beaten by GM due to simple economies of scale.

At Tesla, unit economics are a brutal reality. With only two cars right now, the company’s fortunes rocket or swoon every time it misses or beats production estimates by 1,000 vehicles. Musk has plenty of magic tricks to throw in the mix—from solar panels to giant garage batteries—but at the end of the day, the per-car calculation is hard to escape.

GM can spread costs and revenue over a fleet of about 40 vehicles and four separate brands. It buys parts by the trainload and sourced parts and engineering solutions from across the company. The Bolt’s gear-selector comes from Buick. The nifty rear-view mirror, which is essentially a camera most of the time, is courtesy of Cadillac.

GM didn’t need to go on a building spree either. It’s had an assembly plant outside Detroit since 1983, and it’s been building Chevrolet Sonics there for five years. Batteries, meanwhile, are just another part that can be ordered. GM was able to source its power-packs from LG Chem in Korea.



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