Tesla Motors Inc (NASDAQ:TSLA) has cut its down payment requirement for Model S orders in half as sales for the vehicle show signs of acceleration. Meanwhile General Motors Company (NYSE:GM) Chief Executive Officer Dan Akerson is apparently starting to worry about the EV automaker and see it as serious competition.
Tesla lowers down payment
The company’s website indicates that the down payment is now $2,500, while it was previously $5,000. It also shows that Tesla’s Model S Signature edition reservations are sold out in the U.S., signaling demand for the highest model of these high end vehicles.
ValueWalk's Raul Panganiban with Maurits Pot, Founder and CEO of Dawn Global. Before this he was Partner at Kingsway Capital, a frontier market specialist with over 2 billion AUM. In the interview, we discuss his approach to investing and why investors should look into frontier and emerging markets. Q2 2021 hedge fund letters, conferences and Read More
Those wishing to reserve a Model X still have to come up with $5,000 to put down on the vehicle, although the Model X Signature edition requires a $40,000 down payment.
GM to study Tesla
Bloomberg’s Tim Higgins reports that General Motors Company (NYSE:GM) is starting to see the potential for Tesla to become a disruptive force in the industry. As a result, CEO Akerson has put together a team to study Tesla and determine how it could pose a threat to GM.
GM Vice Chairman Steve Girsky told Bloomberg, “History is littered with big companies that ignored innovation that was coming their way because you didn’t know where you could be disrupted.”
GM killed an electric car
Forbes contributor Michaeline Maynard said that this is the same General Motors Company (NYSE:GM) which started out building the EV1, an electric vehicle, and then killed the $1 billion program. She also says that GM started out supporting Saturn and then killed it. Saturn cars were meant to see if a U.S. automaker could launch solid competition against Japan in the small vehicle market.
What would Tesla do to GM?
So the question remains about what Tesla Motors Inc (NASDAQ:TSLA) could or would do to the century-old automaker GM. The argument has been made time and time again that the two companies address two different segments of the auto market, although Tesla does have its eyes on the mass market over the next few years. The two could be competing head to head very soon, and if the price of Tesla Motors Inc (NASDAQ:TSLA)’s electric vehicle is close enough to the price of GM’s gas guzzling vehicle, it doesn’t take much imagination to see who will win that fight.
So will GM turn out its own electric vehicle this time instead of killing off the project?