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NEW YORK (TheStreet) -- One of the more amusing automotive news reports in recent memoryappeared last week, when we were told that General Motors (GM) - Get General Motors Company (GM) ReportCEO Dan Akerson hascommissioned a task force to learn about Tesla (TSLA) - Get Tesla Inc Report.

Oh boy, does thisdiscovery open up a field day of questions!

Let's start by kicking GM in the gut: Don't you have at least acouple of people dedicated to competitive analysis? If you do, whathave they been doing all along? Did they think they were working forthe government, where no competitive analysis is needed? Do you meanto say that your competitive analysis team hasn't spent any time onTesla already?

In any serious company, the entire management team should be engagedin competitive analysis more than an hour every day. You should talkabout the competition, you should use the competition's products, andyou should conclude what you need to do in terms of "best practices."

In almost any business -- hotel, restaurant, computing, clothing,whatever -- half the battle is won by ensuring that you copy thecompetition's best traits, while avoiding their worst. You don'treally need to invent anything if you can simply copy the best aspectsof each competitor.

When Tesla started shipping the Model S one year ago, GM should havebeen first in line to buy one or several Teslas. Management shoulddrive them every day, and engineering should take them apart.

When the iPhone 5 came out, don't you think


was first in lineand bought a dozen of them and took them apart? Was GM so horriblymismanaged that it didn't do this?

And what about GM's senior management? Presumably they read magazinesand can use the Internet. Tesla Model S has won almost every "Car ofthe year" award. Shouldn't they not just wonder how it drives, butalso make sure to get behind the wheel of such a superior car everysingle day until their own engineering department coughs up a similarproduct?

Okay, let's move on to describe what GM's rationale against pureelectric cars has been all along. This history is well-documented.

The first Volt prototype was engineered in 2006 and the work on the"real" production car started early 2007. GM Vice Chairman Bob Lutzand engineering boss Jon Lauckner decided on the extended-range Voltarchitecture for well-articulated reasons.

Their argument was that a pure electric car was going to be tooexpensive and too heavy, and at the end of the day it was still goingto need too much time to recharge. On the other hand, if you designedan electric car with a smaller battery and 35 miles of range, youcould put a small gasoline engine behind it so as to take away theso-called "range anxiety" and drive as far as you wanted, just likeany other car. It would still drive like an electric car 60%-90% ofthe time for most people.

The Volt architecture has some drawbacks: It's not a "pure" design, soit adds space and complexity with gasoline tank, exhaust system, andso forth. In contrast, a Tesla Model S can be made with a far biggerluggage space.

Basically, as it turned out, there was room in the market for both:GM has been selling approximately 50,000 Volts since inception, andTesla is selling 5,000 cars per quarter right now.

Another way to express it is this: The market for plug-in electriccars remains illiquid, in that there aren't enough variants in themarket to cover every single need in terms of size and performance.Therefore, some people are happy paying $40,000 for a Volt whereasothers are equally happy paying $100,000 for a Tesla.

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As it turns out, however, for the purposes of a test drive, the Teslais obviously the more exciting car. For all of us who have driven it,there is just no comparison. It's easy to see how so many people gofrom being excited about the car, to being excited about the stock.

As a result, Tesla is enjoying a dramatically superior multiple onevery conceivable metric. The market cap is close to $15 billionbased on really no meaningful earnings to date.

GM will never enjoy Tesla's multiples. However, perhaps GM could sinkTesla's multiples for whatever reason? What I mean is that if GM isjealous of Tesla's huge market cap in relation to the size andprofitability of its business, it could blow a hole in it -- if itjust wanted to.

Let me tell how.

It's simple, really. As I mentioned above, the market for plug-inelectric cars -- of all variants, broadly speaking -- is illiquid.There is only one pure EV with anywhere near 265 miles of range. Infact, the closest competitor in the pure EV market is the Tesla-based


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with only a shade over 100 miles of average range. Everyoneelse is mostly in the 70 to 95 miles category.

You can make the argument -- as GM has done -- that by far the mostefficient want to achieve 265 miles -- and more -- of range in a carthat you will drive in electric mode most of the time, is to use theVolt architecture. Yet, at the same time Tesla has proven that thereis a market for a long-range pure EV as well.

There is nothing that is stopping GM from making what is essentially acopy of the Tesla Model S. No, I don't mean an identical copy, but"copy" as in Toyota Camry being a copy of



Altima: Basically, acar that's extremely similar on paper. GM has access to all thetechnology to do this; they just didn't think a car like that wouldfly in the marketplace.

If GM simply copied Tesla in this regard, it would inflict whatcould be a huge blow to Tesla's market cap: Punctuating the scarcitypremium. Tesla is valuable, in part, because some investors perceive itdoesn't have competition.

I can hear the objections already: GM wouldn't really be able to copyTesla perfectly, therefore it wouldn't really work, etc. etc. You aremissing the point! The point is that as long as GM came out with ahigh-performance spacious pure EV with at least 265 miles of range,and priced it within striking distance of Tesla, suddenly Tesla'sstock market valuation would likely come down a lot.

By the way, this goes not only for GM, but for every other car companyas well. Surely at least


out all of these giant corporations willbe able to cough up a Tesla-competitor within the next few shortyears? And when that happens...

Yes, yes, the arguments against this notion are never-ending: In three to four years, Tesla will have moved on to something better and better, and soforth. That is, again, missing the point. Broadly speaking, themajor car companies have access to the necessary technology.

Tesla's superior formula was, in part, the focus on the righttechnology. The other part of the formula, however, was in the keensense of product definition, just like


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with the iPad. Tesla sawan opening in the market, and focused all resources on a superiorcategory-killer.

One can legitimately make the argument that there is a place in themarket for all of these kinds of plug-in cars: The sub-100 mile carssuch as Nissan LEAF, and the extended-range cars such as Chevy Volt.Key to Tesla's success right now is its absence of direct competition.

There is an an additional set of counter-arguments here, and theyrelate to everything outside the car itself. In other words, it'sabout Tesla's direct sales model, and substantial lack of union labor. Could GM copy those aspects, too?

Clearly, for GM to get rid of its dealership model and union labor isunrealistic in the medium term. They will have the right car beforethey get rid of the other handicaps in competing with Tesla.

However, GM does have one advantage against Tesla: scale. It ought tobe able to procure materials and produce a car such as this, at alower cost.

The moral of the story is this: Tesla could very well remain the EVleader for as far as the eye can see. The EV market could, in turn, outgrow all estimates by a mile. One factor, however, where Teslaisn't in control, and could relatively easily be punctuated, is thecopycat department.

One can simultaneously be Tesla's biggest fan -- from both a productand company perspective -- and also recognize that its market multiplewill eventually peak, as a result of far more direct competition. Atsome point in the next few years, I'm guessing this will happen.

At the time of publication the author was long AAPL.

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

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