Tesla could face major competition from General Motors going forward, as the veteran automaker steps up its game in the EV field. On Tuesday, GM outlined a wide-ranging partnership with Korean firm LG for the production of the 2017 Chevrolet Bolt electric car.
GM may unveil Bolt before Tesla Model 3
GM Executive VP Mark Ruess termed the alliance a “joint development agreement,” adding that it goes beyond the usual association between an automaker and supplier. GM introduced the Bolt just a year ago and has accelerated production since then.
Many experts and observers believe that the automaker intends to launch a mass-market, affordable electric car ahead of Tesla’s Model 3. Tesla is expected to reveal the prototype Model 3 in early 2017, while deliveries would begin in 2017, CEO Elon Musk told investors previously.
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The auto industry is not very certain about how the electric vehicle market will eventually turn out. Ruess believes that it is extremely difficult to forecast this space and said that the company is able to break through traditional barriers because of the development of the Bolt and the partnership with LG. “We’re going to be agile and optimistic,” the executive said.
Several of LG’s subsidiaries (LG Electronics and LG Chem) have worked with GM on developing battery cells, dashboard displays, electric motors, and other electronic systems for the Bolt. Late next year, the Bolt will go into production in Michigan.
Most extensive partnership to date
Such a collaboration lays a blueprint for the future partnership. The partnership between GM and LG marks the most extensive partnership to date between a U.S. automaker and an overseas supplier, shifting the development and production cost for the new car to a partner with “considerable technical expertise,” says Business Insider.
With this partnership, GM is positioned to have a comparable supplier in LG. Tesla is working with Panasonic now. Both automakers are betting big on electric vehicles achieving better market penetration than has been seen over the past few years.
Meanwhile, Tesla is working to construct its multi-billion-dollar battery factory in Nevada. Musk hopes to supply enough lithium-ion battery cells through this so-called gigafactory, to support the production of 500,000 vehicles annually by 2020.
On Tuesday, Tesla shares closed down 6.61% at $213.03. Year to date, the stock is down by over 4% while in the last three months, shares are down by almost 25%.