General Motors (NYSE:GM) recently announced that it is developing a new electric vehicle with a range of 200 miles – more than double than that of the Chevrolet Spark. Moreover, the car will be priced near $30,000, which should be affordable for middle and upper middle class Americans.  Inconvenience caused due to a limited electric range is one of the major reasons why GM’s electric vehicle sales have failed to pick up. This could finally change if the automaker delivers on new technologies or designs to extend these vehicles’ ranges and speeds up charging times.
Tesla will introduce the high volume Gen III in another two to three years time. No official pricing has yet been announced, but Tesla says it should cost the customers about $35,000 after the federal incentives. At the moment, the market does not consider GM to be a real threat to Tesla, at least in the electric car segment.
Bankruptcy proceedings, pension costs, high labor costs, political interference etc are the reasons why GM is considered too bureaucratic to introduce a vehicle that is technologically miles ahead of its competition. Tesla on the other hand, is seen as the new face of America – innovative, entrepreneurial and cool. While the Model S evokes awe and admiration, the Chevy Volt evokes mediocrity. 
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But what about the needs of a typical middle class American? If GM can roll out an electric vehicle that has an electric range of 200 miles and a price point near $30,000, will that not appeal to a middle class American? GM also has more than 100,000 employees in North American alone who along with their family members get a discount on every GM vehicle purchased. With the discount, the new proposition could become even more attractive.
Apart from the enhanced electric range, GM is also taking steps to make it easier for its customers to charge the batteries, which is the biggest inconvenience for most electric car owners. Tesla’s cars have the edge here too – two-third of the battery can be charged in thirty minutes. Volt, on the other hand, takes four hours to charge using a 240 volt charger (and up to 10 hours using a 120 volt charger). 
However, automakers including GM and BMW are pouring in a good amount of money on making DC chargers more feasible. Chevrolet already offers a DC charging in its new Spark EV which could reduce the charging time significantly. DC charging can reduce the charging time substantially since 80% of the battery can be charged in 20 minutes.  This could significantly reduce the hassle of charging the cars overnight and would make on-the-go charging possible.
GM’s new vehicle might not be the one to show off, but as long as it caters to the needs of the general public, it should be taken seriously by competitors and investors alike. It does not necessarily need to design a vehicle that is a generation ahead, and as long as the car fulfills the practical needs of the people, it should do fine.
We have a $38 estimate for General Motors, which is about 5% above the current market price.Notes: