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General Motors Just Reentered the Race to Beat Tesla

General Motors has kicked off its second attempt to take on Tesla as the mass-market EV leader.

A typical internal combustion engine has around 200 parts that need to be maintained and possibly replaced if they wear out. An electric vehicle takes that number down to around 20.

Add to that the fact EVs do not directly emit carbon emissions and generally respond faster and better than traditional gas-powered vehicles, and California’s recent controversial decision to get internal combustion engine-powered vehicles off the road in 13 years doesn’t seem so crazy.

Elon Musk has known this for some time - Tesla  (TSLA) - Get Free Report has become the No. 1 EV maker in the world on its premise that gasoline-powered engines are an antiquated and outdated concept destined for the history books.  

The key issue holding back mass adoption of EVs has been affordability. Now, one of the oldest and biggest carmakers in the world is stepping forward with what it says is finally the solution.

An Affordable All-Electric SUV for All? 

General Motors  (GM) - Get Free Report on Thursday kicked off its second attempt to be a mass-market leader EVs with the launch of the Chevrolet Equinox EV.

The all-electric crossover is scheduled to go on sale in the U.S. next fall, starting at around $30,000 -- a price level many automakers haven’t been able to achieve as the cost to build electric vehicles and the batteries needed to power them continues to rise.

The 2024 Equinox EV, which will come in LT and RS models and has an estimated range of 300 miles, will test GM’s ability to make an affordable EV that appeals to a broad swath of U.S. consumers that either can't afford or don't want a Tesla.

Source: General Motors

Source: General Motors

GM CEO Mary Barra last year said the Detroit automaker can “absolutely” catch industry leader Tesla in U.S. sales of electric vehicles by 2025. Those plans include more than 1 million units of EV production capacity in China and North America, each, by that time.

The Chevy Bolt, which went on sale in December 2016, was expected to be GM’s first affordable, mainstream EV but its annual sales have yet to top 25,000 – a far cry from mainstream sales such as the gas-powered Equinox at hundreds of thousands of units per year.

Electric Cars Are No Longer a 'Dumb' Idea  

To be sure, GM and Tesla both have formidable competitors in the rear-view mirrors: Ford  (F) - Get Free Report, of course, as well as Jeep, which just this week unveiled its own plans to roll out plug-in versions of its lineup.

Volkswagen  (VLKAF) , BMW  (BMWYY) , Mercedes-Benz  (DDAIF)  and Kia  (KIMTF) , and newer EV makers including Rivian  (RIVN) - Get Free Report, Fisker  (FSR) - Get Free Report, Nio  (NIO) - Get Free Report, Xpeng  (XPEV) - Get Free Report and others are also working on cranking out battery powered vehicles.

“When we started out here, we were told electric cars were impossible, and even if, really if you could make an electric car with a couple hundred miles range, then nobody would buy it anyway because people love gasoline cars,” Musk told shareholders at the company's annual meeting last month.

“When we started out it was dumb to start a car company and then dumb squared to [start] an electric car company. Now we have the highest operating margin in the whole industry.

“There’s a lot of talk of competition among electric vehicles. But really EVs take market share from gasoline cars. And from Tesla’s standpoint, we obviously welcome this," Musk said at the meeting.

“We’re very excited to see that the big car companies are embracing electric vehicles. If you were to rewind the press releases to five years ago that was not the case.”