For some time, it’s been plain that the legacy automakers are behind Tesla in terms of technology—the usual estimate is about five years—and that the trendsetter’s technical superiority is reflected in its dominant share of the small-but-growing EV market. Obviously, Big Auto is not pleased with being lapped by the brash Californian upstart.
General Motors Chair Mary Barra recently told CNBC that her company can “absolutely” catch Tesla in US EV sales by 2025. GM says it’s going to launch some 30 new EV models by 2025, and Ms. Barra believes this avalanche of new models will be enough to bury the current EV leader.
“I am very comfortable, because when people get into these vehicles, they are just wowed,” Barra told CNBC. “So we will be rolling them out and we’re going to just keep working until we have No. 1 market share in EVs.”
It’s true that Tesla will soon be facing real competition for the first time in its existence—e-pickups from Ford and Rivian, luxury sedans from Lucid, a nifty crossover from VW, cheap electric transportation from Chinese brands—and most analysts expect the California carmaker’s commanding market share to erode. IHS Markit expects Tesla’s US EV market share to fall from 79% in 2020 to 56% in 2021, and further predicts that Tesla might have as little as 20% of the market by 2025.
Make no mistake, GM’s electric ambition is a good thing—healthy, or even cutthroat, competition is what drives progress. But there are several reasons to be skeptical that GM will be able to catapult to the No. 1 position in a mere four years.
YouTube: CNBC Television
Yes, the company says it has 30 models in the pipeline. But at the moment, it has the Chevy Bolt EV and EUV, two low-volume models that recently had to halt production to fix a problem with battery cells. The next two GM EVs to hit the streets will be the GMC Hummer pickup and the Cadillac Lyriq. Neither of these is aimed at a mass-market segment—their contributions to GM’s market share will be modest at best. Yes, there’s an electric Silverado, and one or two Chevy crossovers, in the planning stage. Those could deliver some serious sales, but it will be a couple of years before they appear at dealerships.
Furthermore, this isn’t a one-on-one battle between GM and Tesla. GM wants to be No. 1, but, as the late great Alex Trebek might have said, “Ford and VW will have something to say about that.”
There’s also, as always, the question of commitment. GM, along with every other legacy brand, has told us EV journalists that it was getting serious about EVs several times in the past. However, when Trump took office, GM and its colleagues instantly sent a letter begging the new administration to water down the emissions regulations that had forced them to build EVs in the first place. One year from now, the Democrats are likely to lose their majority in Congress, and in that case, any and all federal pressure to produce EVs will be dead in the water. If that happens (and we sincerely hope it doesn’t), does anybody think GM will stick to its “30 new EVs” pledge?
Another huge reason for skepticism is that Tesla is a moving target—a very fast-moving target that announces new technological and marketing breakthroughs seemingly every month or so. As Electrek’s Fred Lambert put it, “In order to believe that GM can catch up to Tesla within four years, you need to believe that GM is going to catch up to Tesla within the next two years and then accelerate faster than Tesla the two years after that.”
But the real reason that neither GM, nor Ford, nor VW, nor any other legacy brand has come anywhere near Tesla so far, is a very simple one: Tesla doesn’t sell gas-powered vehicles. It devotes all its energy to selling EVs, while the other firms are caught in the Innovator’s Dilemma: if they want to go “all in” on EVs, they’ll have to go all in on selling them, and that means telling their customers: “Don’t buy a gas vehicle.”
There’s no sign that GM, or any other legacy OEM, is yet willing to do that.