GM Has Emerged As Tesla's Biggest Threat (TSLA)

Tesla Inc (NASDAQ:TSLA) is the biggest innovator in the auto world over the past decade.

The EV startup almost single-handedly forced every other automaker to up their game in terms of electric cars and autonomous driving. Backed by a huge amount of cash — and an equal amount of hype — Tesla has captured the imagination of drivers and the investing public.

But as Business Insider reports, the company’s lack of scale still haunts its chances to be anything other than a niche player in the market, and the biggest automaker in the U.S. — General Motors — is now hot on its heels in terms of technology:

Tesla has been around for 14 years, and for most of that time, GM has been content to let Elon Musk and his company take on all the risks associated with electric and self-driving cars. But with three years of booming US sales under its belt and a healthy balance sheet, GM is ready to take its own risks.
And it’s doing so like the global giant it is. Tesla has one factory, about 33,000 employees, and will sell a record 100,000 cars in 2017. GM has dozens of plants, over 200,000 employees, and builds a million vehicles a year. It isn’t David vs. Goliath — it’s David versus Goliath and all Goliath’s relatives and friends.

Tesla hopes to produce a million cars annually by 2020. Considering the fact that it’s only 10% of the way there now, that seems almost inconceivable. 36 months is simply not enough time to increase production ten-fold.

GM has the pedigree, the scale, and the profitability to beat Tesla. All it needs is a couple of stylish hit EVs to win the battle.

Tesla Inc shares closed at $306.53 on Friday, down $2.32 (-0.75%). Year-to-date, TSLA has gained 43.45%, versus a 20.00% rise in the benchmark S&P 500 index during the same period.

TSLA currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #17 of 24 stocks in the Auto & Vehicle Manufacturers category.

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