NEW YORK (TheStreet) -- Tesla (TSLA) stock rocketed immediately following its press conference at the Detroit Auto Show, closing Thursday at $170.97. But that wasn't the only good news for Tesla in Detroit. There is a far more important and fundamental story driving Tesla in the relatively near term.
Of all the numerous interesting and important considerations for investors who are betting for and against Tesla, certainly near the top of the list is the one about competition. We know what the competition is today, but where will it be in one, two, three years from now?
Obviously, at some level, Tesla doesn't have any competition -- today anyway. Nobody else makes a powerful and spacious all-electric car with 265 miles of range or anywhere close to it. Hard-core segmentation purists will therefore say that Tesla has zero competition today.
However, I could also make the claim that on the margins, cars such as the Chevrolet Volt, Nissan Leaf and the soon-to-arrive BMW i3 are and will be taking sales from Tesla. This, despite the vast differences in price -- duh! -- and various capabilities such as acceleration, range and interior space.
In other words, some people who buy a Tesla have cast a very wide net in their purchase decision. They may never have stretched that high up in the price scale before or had any interest in buying a car at that price even if they had plenty of money. Some Tesla buyers indeed find themselves in this gray zone where traditional purchase metrics don't apply.
With this in mind, what does Tesla's competition look like based on my conversations with numerous auto industry executives at the Detroit Auto Show?
I find only two auto makers who give the impression of wanting and planning to go after Tesla as hard as possible, as soon as possible: General Motors (GM) and BMW. Does this mean they will have a head-to-head competitor to the Tesla Model S by 2016 or so? Not necessarily. It does not need to be an identical head-to-head kind of car, and perhaps not by 2016.
What I mean by serious competition is something along these lines: a powerful electric motor, where 100% of the power envelope is reached without any assist from any gasoline or diesel engine. Then package this in an upscale body, preferably something other than a plain-vanilla body type.
You see, there will be -- and already are -- plenty of plug-in cars that fall into either of these two lesser categories:
A. Long range but with the range achieved by gasoline or diesel engine assist, and where the electric portion of the drivetrain is not only short range (10 to 25 miles) but also accomplished by a weak electric motor unable to give full power by itself. Ford (F), Toyota (TM) and the Volkswagen Group (which includes Audi and Porsche) all fall into this category, as do Volvo, Mitsubishi and Honda (HMC). BMW will have entries in this category starting already in 2014.
B. Full-power, all-electric but without anywhere near Tesla's legendary 265-mile, all-electric range. Nissan, Ford, Honda, GM, BMW, Toyota and VW have cars in this category.
As you can tell, several auto makers already offer cars in multiple categories where you can say that, at least peripherally, they compete with Tesla. As a minimum for price reasons, this is likely to continue.
Nissan is a curious case at the moment. Obviously Nissan has been the key industry pioneer with the Leaf, which started deliveries in December 2010 and where over 100,000 have been sold world-wide since then. A well-equipped Leaf costs around $35,000 before tax adjustments.
Nissan owns Infiniti, which is its luxury brand. Two years ago, Infiniti showed an early prototype of what a luxury sedan version of the Nissan Leaf would look like.
The feedback to this Infiniti prototype was very poor. It was to have no more range than the Nissan Leaf. With a price perhaps around $45,000, it would be no less expensive than the upcoming 2017 Tesla cost-reduced car with a talked-about 200-mile range. In other words, the Infiniti electric car as envisioned two years ago would have become an industry laughing stock.
Somewhere along the line, perhaps when the Tesla Model S started shipping in the middle of 2012, Infiniti realized the grim future for this prototype. The project has now been delayed indefinitely, and we just don't know what to expect -- except that we most likely won't see an Infiniti electric car until at the very least late 2016, probably later.
Yet, I watched Nissan's press conference at the Detroit Auto Show, and product boss Andy Palmer assured us that Nissan was fully committed to continued leadership in electric cars. Other top Nissan executives also spoke in extraordinary terms about the success of the Leaf. But then you combine this with Infiniti's increasing lack of interest in electric cars, and what are we to believe? Is this all talk, but nothing of interest in terms of competing with Tesla head-on?
Knowing nothing else, I have to assume that Nissan will continue to develop the Leaf, but not devote the resources to compete with Tesla -- or for that matter with GM's and BMW's more interesting electrified offerings -- at least in the near term.
There are many auto makers where it is hard to get a clear sense of where they want to go in terms of competing with Tesla -- or not. They may have some of those offerings I described above in the market today, but they aren't committing to any plan publicly. Perhaps more important, they sure aren't showing any relevant and realistic prototypes.
It is entirely possible many of these companies are pursuing the strategy of "shut up until our car is ready for production." For whatever reason, they don't want to tip their hand. Perhaps they consider electric cars politically or financially controversial. Perhaps they don't want to set expectations too early. Who knows?
Or perhaps they don't have any serious plans to compete directly with Tesla any time soon. In this category I put Ford, Toyota and Honda, to mention the bigger ones. Huge surprises are possible, but we just don't know and we sure don't have any signs from these companies.
Other companies have been vocal about their devotion to plug-in hybrids. The VW group is at the top of this list, and Volvo has been clear as crystal as well.
Toyota, Honda and Hyundai believe they will assume leadership in hydrogen fuel-cell cars. Mercedes is also talking about this but hasn't given a date for a specific car to enter the market yet.
This leaves us with BMW and GM. Both companies speak respectfully and admirably about Tesla. They have driven the Model S and they love it. There is zero doubt in my mind that they will go full bore against Tesla in some forms yet to be unveiled.
This is not the space to reiterate how GM's and BMW's current offerings such the Volt, the ELR and the i3 are interesting and relevant already today, in terms of being partial Tesla alternatives. The larger point is that these are only the first shots being fired, with far more to come in 2016 and 2017. 2015 will likely provide us with more details on what these new cars could be.
All in all, Tesla has at least one year's worth of smooth sailing ahead on the competitive front. The Chevy Volt 2.0 and a BMW i4, i5, i6 and i7 will likely become Tesla's main worries before any others show up in 2018 and beyond.
What looks like a somewhat benign competitive landscape for the next year or two is probably an incremental positive for Tesla. Small wonder the stock is up.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.