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Tesla and the New Frontier in Electric Car Competition

Stocks in this article: TSLA GM F NSANY TM

Whether it's General Motors (GM), Ford (F), Nissan, Toyota (TM), BMW or Volkswagen -- just engineering that 200- to 300-mile all-EV direct Tesla competitor for launch in 2017, 2018, whatever isn't going to cut it. The car itself is only half the equation.

As a future electric car buyer, I may not ever make use of fast-charging. But if my choice is between a 200- to 300-mile Tesla, and a 200-to 300-mile EV from another auto maker with no decent fast-charging network, I will go with the Tesla every day -- all other things equal. Once other car companies have caught up on the all-electric range (200-300 miles at various price ranges), the speed of charging becomes the critical competitive differentiator.

If I were sitting in the C-suite of any of the major car companies, I would feel embarrassed today. Tiny Tesla with a number of engineers to the right of my decimal point is well underway in building out an electric car-charging network across multiple continents that can fuel a car over 150 miles in 20 minutes -- and it keeps getting even faster.

Yes, I know: All in all, the number of Tesla charging stations remains relatively small -- but it's growing fast, and has already become a crucial selling argument. If you think Tesla made headway in 2013 because of its charging network, you just wait until 2015 when the Model X ($90,000) enters production, and 2017 when the Model E ($40,000) does. The charging network will be gigantic by then -- literally as well as metaphorically.

One wonders what the MBA competitive analysts at the major car companies are doing all day long. What are the top executives thinking? The Tesla noose is tightening, even though it just started a year ago. In the car industry what seems like a very long four years in any other industry is in the panic category for car development. It takes four years to develop a car.

Tesla does not need 150,000 charging stations in the U.S., just like there are gasoline stations. Most people charge at home and at work on well over 90% of days. You only need these faster chargers to ensure that you can travel in the long, rural, freeway areas -- and perhaps somewhere in the metropolitan area where you can charge if you're in a panic and are willing to pay more.

Tesla will be at this coverage level in just a few short years, 2015. If the tipping point hasn't already happened by then, it will in 2015. It will be game over -- in Tesla's favor.

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