Fri Jan 08 2016
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GM’s Chevrolet Bolt to Pose a Challenge for Tesla (TSLA)?

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General Motors Company (GM – Analyst Report) unveiled the electric Chevrolet Bolt at the Consumer Electronics Show (“CES”) 2016. Chevrolet Bolt combines technology with affordability that will enable the vehicle to be easily accessible to the masses.

Chevrolet Bolt offers a range of 200 miles and accelerates to 60 mph in 7 seconds. The vehicle, after the federal income tax rebate for electric vehicle purchase, will be priced at $ 30,000. Within a span of 12 months, General Motors was able to convert Chevrolet Bolt from a concept vehicle to one ready for production. It is expected that the electric hatchback will be available in showrooms by next year.

Chevrolet Bolt’s design is similar to that of average vehicles. However, it boasts several new technologies. The car’s battery pack is a part of the chassis and is placed beneath the passenger cabin. This enables the vehicle to have a flat interior floor. The battery charges to 80% in 60 mins.The Bolt also features a 10.2-inch touch screen which allows control over the car’s functions and entertainment systems; and OnStar 4G LTE, which turns the EV into a Wi-Fi hotspot. Additionally, the vehicle features MyChevrolet Mobile, which helps the driver to see the vehicle charge status, set the cabin temperature and start the vehicle remotely. The vehicle is also equipped with cameras, which help in parking it.

Tesla Motors, Inc. (TSLA – Analyst Report), which occupies a dominant position in the electric vehicle market, may face tough competition from General Motors’ new Bolt. Tesla’s Model S attracted consumer attention due to its stylish features and high performance. However, it is a luxury vehicle priced at around $ 70,000. Compared to Model S, Chevrolet Bolt is less sleek, but has a price less than half the price of the former. On the other hand, Tesla’s third-generation electric car, Model 3, which is expected to cost half as much as Model S, will likely be unveiled in Mar 2016 and launched in late 2017.

In addition, Tesla is facing opposition to its direct-selling model in some U.S. states such as Texas, Arizona, Michigan and West Virginia that have banned direct sales of vehicles by any automaker. This restricts Tesla’s ability to sell cars, as it relies solely on direct sales. On the other hand, Chevrolet Bolt customers will not face any such problem as General Motors believes in the dealer model. With about 3,000 dealers, customers should never face problems related to vehicle servicing.

U.S. automakers continue to invest in the development of new vehicles to cater to fuel efficiency standards. However, electric vehicles occupy a very small portion of the global automobile market. It will be interesting to see how Chevrolet Bolt manages to capture the market.

While General Motors currently sports a Zacks Rank #1 (Strong Buy), Tesla carries a Zacks Rank #4 (Sell).

Some favorably ranked automobile stocks include Lear Corp. (LEA – Snapshot Report) and Autoliv, Inc. (ALV – Analyst Report), both carrying a Zacks Rank #2 (Buy).

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Photo: Duncan Rawlinson. Duncan.co via photopin cc


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