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[video] GM: Six Years Ahead of Tesla

Stocks in this article: GM TSLA BMW NSANY

It's a little bit like those nonstop New York-Singapore flights: You have to carry more fuel, which requires more fuel and then the flight is cancelled.

GM had precisely this debate internally in 2006-2007 as they determined the architecture of the Chevrolet Volt. They debated all-electric versus extended-range electric architectures.

This debate is accounted for in the book: Chevrolet Volt: Charging Into The Future by Larry Edsall.

To wit, as described in the book, GM engineering guru Jon Lauckner laid out the argument to Bob Lutz and the rest of the GM engineering team: All-electric means you have to keep carrying more weight in an ever-increasing vicious cycle. In Lauckner's argument, at some point you still have to spend a long time recharging the car, no matter how much money and weight goes into the battery, so you just can't win.

In other words, if you assume that recharging a battery will take a long time, an all-electric car becomes a very difficult economic proposition. As a result, GM was able to instead make "the 90% solution" in the form of the 380-mile range Volt, already in 2010 -- at least six years ahead of Tesla's $40,000 car with only a 200 mile range.

However, the 100% electric vs. Volt extended range argument continues to shift even further: New forms of recharging batteries.

Two of Tesla's great innovations are in the areas of recharging and battery swapping. Tesla has accomplished unprecedented recharging power using 440 volt DC 120 amp circuits, where you can get more than 150 miles in 30 minutes. That's a giant leap from anything previously available and was not considered possible by GM or Lauckner in 2006-2007 when the Volt was decided.

Furthermore, Tesla has showed that it can swap a battery in under two minutes and that this battery can yield 265 miles of range. That solution will be rolling out in selected locations in the coming months and would cost $80 per swap.

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