California-based Tesla Motors has taken the number one spot in the luxury electric sedan market with its Model S, putting the company in a race with GM and other automakers to create the safest and most affordable electric vehicle for the growing number of consumers who want them. Tesla has emerged as a major competitor for the Detroit Three as America’s fourth domestic automaker.
GM, the world’s second largest automaker, has had recent success with strong new models, and now finds itself pitted against Tesla’s innovation prowess. The two companies have even attempted to woo each other’s engineers in order to compete according to engineer Mark Reuss, GM’s senior VP of global product management.
Elon Musk, head of Tesla Motors, is not afraid to break away from tradition, from using social media for marketing to opening a chain of stores instead of dealerships. His methods have sparked controversy within an industry long set in its ways. There is still some question, however, that Tesla can really pose a major threat to other industry leaders and sustain that position.
Reuss said recently in an interview, “I really, really believe that the world and the industry needs an Elon Musk. I think it’s really, really healthy. I really admire the man for everything he’s accomplished with Tesla. He’s basically built a brand, which is very hard to do in a very mature industry. So that’s huge.”
Tesla was largely ignored in the beginning, but has captured market share with its Model S, and has earned the respect of its competitors. Now Musk has set the goal of creating an electric sedan in the range of $30k that would appeal to average consumers. Jerome Guillen, who is the Model S chief engineer and is now also Tesla’s VP of worldwide sales and service, told the Free Press that Tesla’s affordable electric model would go into production in three years.
Theodore O’Neill, Litchfield Hills Research analyst, said, “Tesla already has the base of the technological understanding of the car and its performance and the way it works at levels no one else has captured for their cars. That base of knowledge does not exist at GM. I think that puts them well ahead.”
It remains to be seen who will come out on top. Safety issues must be addressed, and battery technology is still being developed, although Tesla seems to be leading in that category as well. GM and Tesla are not the only companies developing technology to make electric vehicles more affordable, and there is still a chance that the other major players might get there first.