Advice for GM's CEO Mary Barra

NEW YORK (TheStreet) -- All automakers, including General Motors (GM), are in the early stages of a siege from the most innovative automotive company, Tesla (TSLA).

This article is an action plan for what GM and its newly announced CEO, Mary Barra, need to do in order to prevent Tesla from taking away a large chunk of its customers within a decade from now.

Let's first stipulate what kind of cars people want in the new world of electrified transportation:

A Wide Range of Body Styles and Sizes

Cars are different for a reason. People are different and so are their needs. You have small cars, big cars and all sizes in between. Some cars are two-wheel drive, others four-wheel drive. Some have high ground clearance, others low.

So far, there has been too little choice as to the body styles offered with some form of plug-in. Mostly they have been smaller cars, some four-seaters (Chevrolet Volt and Spark come to mind). Even the Tesla Model S doesn't have a roomy rear seat -- it's very low and ceiling height is too low.

There are very few four-wheel drive plug-ins available worldwide (only Volvo and Mitsubishi), and about as few with high ground clearance. None with three rows of seats, fitting seven or eight full-sized adults.

Many people I know who have a Chevy Volt are telling me: I want my next car to be as large as a Honda (HMC) Odyssey or Chevrolet Suburban. This is where a good chunk of the market will be, and Tesla will be there with the Model X in 2015 or 2016 at the latest.

A Choice of All-Electric and Extended-Range (Hybrid)

While the math made by most people in the auto industry points to extended-range hybrids (such as the Volt) being the most economical plug-in over the lifetime of the car, Tesla and Nissan among others have proven that all-electrics also do sell, whether it's rational or not. There will be a rainbow of solutions, again because people and their needs are different.

From a technical standpoint, the three most interesting cars to be launched are the Chevrolet Volt, the Tesla Model S and the BMW i3 with range-extender. They represent the three major architectural choices for full-power electric motor driving -- all-electric with long range, as well as two types of extended-range.

The Importance of Infrastructure, Even as a Strict Marketing Tool

Most people with a plug-in car charge in two places, most of the time: at home and at the office. That said, most of the time we also don't need -- or want -- insurance. Insurance is not for what we do every day or every week. Perhaps not even every month. It's for the outlier event.

Most people I know never drive from Los Angeles to San Francisco, from Boston to Washington D.C., or equivalent. If you're going on a 400-mile trip, you fly. Time is valuable and an airplane is more advanced than creeping at 75 miles per hour one foot off the ground, ready to be decapitated by the next oncoming 18-wheeler.

For example, most people I know who bought a Tesla in California had not driven from Los Angeles to San Francisco in decades, if ever. If you're paying $100,000 for a car, you're not a starving college student. You fly -- sometimes even in a private plane.

But now, just because you bought a Tesla, you feel the urge to "show everyone you know" that you can indeed make this drive. And that's great! It works very well.

Well, at least it works very well under a few circumstances. Let's list a couple of obstacles:

Charger congestion: People often cite that you can get 200 miles on a 20-minute charge -- or 150 miles on a 30-minute charge -- or whatever, at a Tesla charger located between two major cities such as San Francisco and Los Angeles. Thats basically fine, even though I'd prefer to stop for 10 minutes instead of 20 or 30 -- and I'd like to stop when I feel like it, not at specific spots spaced 150 or even 100 miles apart.

But that's if there is nobody ahead of you in line for the chargers! Many electric car charging stations only have three to six "pumps" and they may all be busy when you get there. Even worse, there may be a few cars ahead of you. Now that 20- or 30-minute stop can turn into an hour or two. This prospect would be a severe drawback.

Re-routing: It could get even hairier. Let's say you're driving from San Francisco to Los Angeles. As you approach Bakersfield on the I-5 freeway, the signs say the Grapevine incline has been shut down because of snow. As a result, now you are being re-routed onto 58 East before heading south before the Edwards Air Force Base.

This is a significant re-routing, and because your last charge was at Harris Ranch on the I-5 you no longer have the ability to charge at a Tesla fast-charge location before you hit LA. Ouch. You will now have to find a 240 volt AC charger somewhere southeast from Bakersfield, and wait several hours.

The point here is that as great as the Tesla chargers are -- and they really are fantastic -- they do not solve every problem. There could be too few chargers, both geographically in terms of spacing, and in relation to the number of Teslas on the road.

So how should GM position itself to compete with Tesla, BMW, Nissan and the others? Here is a three-step plan for Mary Barra to implement:

1. Offer evolved versions of the Volt drivetrain in most body styles.

The single biggest reason the Volt sold so relatively poorly -- 2,000 per month in the U.S. and few more internationally -- is that it only fits four people and the rear seat is generally cramped. Make the Volt in the minivan body styles of Mazda 5, Honda Odyssey, Dodge Caravan and Toyota (TM) Sienna and sales would turn up drastically.

Many people need to fit five people, not four -- and yet other people need to fit six, seven or eight people. GM makes great cars for that -- Chevrolet Tahoe, Suburban and Traverse. Now put the Volt drivetrain in them!

2. Put an end to the otherwise endless talk about how the Tesla Model S is so different because it's all-electric and has 265 miles of range -- just make a GM car like that!

Not only GM but also other car companies continue to basically tell the world that they, too, could have made a Tesla Model S if they just thought there had been a market for it. Okay, now that we know that there was, prove it! GM should make a large hatchback sedan, with the battery placed into the floor, spend whatever it takes to give it 300+ miles of range, and sell it for the same price as Tesla. Why not?

3. Build your own charging stations!

It may be economic insanity on a standalone basis but as an end-to-end product statement, including the marketing and long-term commitment, having your own DC chargers would be a good idea for GM. Think about it: If little Tesla can get so much publicity for deploying 50 to 100 to 500 DC chargers over a few years, why couldn't GM?

If need be, GM could share the chargers with BMW, Nissan and others. That's one way to mitigate the cost.

The variable right now is this: Has GM already been working on all of these things or would it begin right now? GM had better be deep into development of all of these aspects, well beyond the obvious Volt 2.0, or it will be in trouble come 2016-2017.

I assume work is well underway on a large family of models, architectures and body styles, and that within the next 12 to 18 months we will hear a lot more about GM's plans to take on Tesla with a lot more efforts in 2015 and beyond.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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