Tesla Motors Inc (NASDAQ:TSLA) has gotten plenty of press about the Model S sedan. That vehicle has gotten loads of praise from almost everyone, even many who consider the company’s stock way overvalued. And as Tesla makes plans to move into the mass market auto industry in a few years, the company will have another competitor: General Motors Company (NYSE:GM).

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GM announces 200-mile range EV

Today Mike Ramsey of The Wall Street Journal reports that GM is working on a $30,000 electric vehicle. The company said that the vehicle will be able to go 200 miles on a single charge, unlike current $30,000-range EVs from other automakers.

This could, theoretically, put the vehicle in league with Tesla Motors Inc (NASDAQ:TSLA)’s Generation III vehicle, if Tesla is able to pull off what it says it can do. Not too long ago, it was revealed that General Motors Company (NYSE:GM) was putting together a team to study Tesla’s methods. This makes even more sense since the company is planning to more directly take on Tesla by offering a $30,000 electric vehicle, possibly starting around the same time Tesla puts its Gen III vehicle up for sale.

Tesla’s quest for a $30,000 EV

Currently there aren’t many automakers in the same league with Tesla Motors Inc (NASDAQ:TSLA), and for good reason. At this point, the company focuses on the luxury market, and its cars are the only ones with a range of over 200 miles on a single charge. Tesla management has said though that a Generation III electric vehicle that will sell in the $30,000 range is in the making. The hope would be that the vehicle would also have a range in excess of 200 miles, but it is still a few years off yet.

Battery problems for Tesla and GM

Interestingly enough, General Motors Company (NYSE:GM) said they are also still a few years away from being able to offer a $30,000 EV with such a long range. GM VP Doug Parks said although they have the technology for an electric vehicle with a 200-mile range right now, the cost of the batteries keeps the price of the vehicle too high.

Analysts have long been concerned about Tesla Motors Inc (NASDAQ:TSLA)’s effort to make a less expensive Generation III vehicle, mainly because of the high price of batteries. Bears say it can’t be done, while bulls say it’s only a matter of time until battery costs come down enough to do it.

Tesla says its battery costs are lower

Current estimates from the Department of Energy’s Argonne National Laboratory suggest that automakers spend approximately $500 per kilowatt hour on their battery packs, which puts a 24 kwh pack at $12,000. But JB Straubel, chief technical officer at Tesla, said his company’s battery costs are half or maybe even a quarter of the industry average. He said their battery packs use thousands of commodity battery casings instead of specialized batteries, which brings their cost down.