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Electric Avenue

GM Is Feeling Threatened By Tesla

The company that built—and then killed—the first modern electric car is starting to feel the pressure of disruptive innovation.

GM Is Feeling Threatened By Tesla

The electric vehicle industry as a whole isn’t much of a threat at this point to automakers who are focusing on gas-powered vehicles. So far in 2013, just 298,682 hybrids, plug-in hybrids, and battery electric vehicles have been sold in the U.S., out of 7,789,194 total vehicles. The vast majority of the electric drive vehicles sold have been hybrids. And yet, automakers are worried about Tesla, a small but growing force in the vehicle world that is singlehandedly keeping EVs at the forefront of news.

According to Bloomberg, General Motors CEO Dan Akerson is so intrigued by Tesla—and concerned that it could one day threaten GM’s business—that he has brought together a team specifically to study the Silicon Valley startup.

GM vice chairman Steve Girsky explained in an interview:

"He thinks Tesla could be a big disrupter if we’re not careful," Girsky said. "History is littered with big companies that ignored innovation that was coming their way because you didn’t know where you could be disrupted."

In the past, GM has been slow to put new patented technologies into its vehicles—and it famously killed the EV1, the first mass-produced modern electric car. Tesla CEO Elon Musk isn’t a big fan of patents in the first place, but he has done an excellent job of putting new technologies, such as battery swapping capability, in his vehicles. Musk has also been bold in deploying unproven solutions, like the rapidly expanding Tesla EV Supercharger network.

GM is in direct competition with Tesla; the company’s Chevrolet Volt plug-in hybrid has probably been the most talked about EV outside of the Tesla Roadster and Model S. But as Bloomberg points out, the $69,900 Model S outsold the $39,145 Volt in the first quarter of 2013. At some point, Tesla’s burgeoning business may even pose a problem for GM’s gas-powered vehicle sales.

A world where EVs can outsell gas-powered cars seems like a fantasy right now, but turning fantasy into reality seems to be Elon Musk’s self-appointed mission. He is the man working on a high-speed "Hyperloop" system that can transport passengers from Los Angeles to San Francisco in 30 minutes, after all.