Photo: Chevrolet
Tesla may have made a name for itself as a pioneer in the all-electric vehicle space, but General Motors and sub-brands like Chevrolet, GMC, and Cadillac are making a massive push into that market. As America’s largest automaker, GM was already in prime position to out-deliver Tesla, both in terms of quality and volume.
But the secret to outperforming Elon Musk’s electric brainchild on a financial level may be easier than you think — and all GM has to do is, well, everything it’s already doing.
Experience the future of driving: Go emissions-free with the 2021 Bolt EV
Photo: Chevrolet
The answer lies, as it often does, somewhere in the tangled mess of government regulations. According to CNN Business’ Chris Isidore, 2020 was the first year that Tesla actually posted a net profit. The interesting part is that the majority of its money doesn’t come from direct sales; it comes from more or less gaming the system.
You see, Isadore says that “11 states require automakers sell a certain percentage of zero-emission vehicles by 2025. If they can’t, the automakers have to buy regulatory credits from another automaker that meets those requirements — such as Tesla, which exclusively sells electric cars.” Apparently, that’s been working out pretty well, as the company has earned $3.3 billion selling credits since 2015, $1.6 billion of which were acquired in 2020. On the other hand, its sales-based profit last year totaled just $721 million.
Beating Tesla at its own game
Photo: Chevrolet
That’s where GM comes in. Chevrolet currently has zero-emissions vehicles like the Bolt EV and Bolt EUV in its lineup. Cadillac isn’t far away from launching the Lyriq EV and could announce official release dates for new models like the Celestiq and Symboliq at any moment. Heck, even GMC brought the famously gas-guzzling Hummer as an electric vehicle. Plus, General Motors at large intends to be fully carbon neutral within 20 years.
For GM, that’s significant. Not only will it be able to leverage its recognizable and widely beloved brands to convince drivers to take the leap to an EV and take advantage of its massive production scale, it will be able to save money by not buying credits — or even make some extra by selling them. For Tesla, it means losing an enormous source of income and needing to go head-to-head with an established company that’s nearly 100 years its senior.
In short, all GM really has to do to topple Tesla and claim complete dominance in the EV market is to stay the course. Or, I guess, wait for Elon Musk to lose even more focus and move to Mars to be with Matt Damon.
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