GM is joining the gravitation towards hybrid and all-electric vehicles that has been occurring in the wider automotive environment for some time. Last week, the automaker announced it will have 20 electric cars on the road by 2023, with plans to virtually eliminate the production of all vehicles powered by fossil fuels.
Concerns for the environment play a factor but no doubt financial influences and the ability to innovate faster than rival Tesla are also present and it’s got many talking about how this move by General Motors will compare with the line of Tesla electric vehicles already on the market. It’s no secret that Tesla is one of the most influential manufacturers of e-vehicles, however, recent bottlenecks concerning the production of the Model 3 show that implementing green technology is logistically challenging.
Considering the size and expertise of GM, you’ve got to wonder whether this massive manufacturer could overtake Tesla? And, whilst Tesla has been focused upon the production of compact models costing upwards of $60,000, General Motors is more concerned with mass production of light-duty trucks costing less than half that and will travel more than 200 miles per charge. If there’s one thing we know about society it’s that affordability and accessibility always wins the day. However, for now Tesla are still outselling their competitors.
Luxury car manufacturers such as Jaguar and Aston Martin have already taken on a greener stance. From the standpoint of competition alone, it makes sense for GM to blaze a similar path. Another metric to mention involves the actions of major marketplaces such as France, Norway and Great Britain. These nations are all planning to eliminate engines powered by fossil fuels in the coming years. Perhaps most importantly is the fact that powerhouses including China (this summer, GM sold 3.6 million EVs priced at $5,300) and India are soon to follow. By producing more all-electric vehicles, General Motors will continue to ensure that its international market share remains intact. In fact, immediately after the news of GM’s-all-electric-future, market analysts announced General Motors Co.(GM) shares rose 3.1%, and due to manufacturing bottlenecks, Tesla Inc (TSLA) shares decreased.
This move proves highly beneficial to the green tech sector. Not only are we referring to increased investments as traders move away from assets backed by the production of fossil fuels, but we also need to address the fact that technological advancements are now becoming financially viable. Hydrogen fuel cells and electric batteries which can be recharged in a fraction of the time previously required seem to be leading the way. The main issue is that in the past, such methods were costly and difficult to produce on a bulk scale but scientific and government advancements have now enabled these alternatives to become fiscally viable. Thus, companies involved with green technology should experience a burgeoning marketplace in the coming years. This is particularly relevant for those specializing in power sources intended for motor vehicles.
Of course, the fossil fuel industry will likewise be profoundly affected. Some even feel that the impact of green vehicles could entirely halt fossil fuel growth by the year 2020. The main takeaway point here is that less demand may force large conglomerates such as OPEC to raise prices or otherwise risk monumental losses. This could be problematic for countries such as Iraq and Kuwait which rely upon oil exports for a sizeable portion of their GDP.
It can only be surmised that other companies will follow in the footsteps of General Motors. Still, we should keep in mind that GM was one of the last organizations to embrace this future technology. Companies such as Nissan, Toyota and Honda were touting the benefits of all-electric vehicles more than a decade ago. It only stands to reason that any firms which hope to keep a competitive edge will be forced to modify their production methods.
As the green revolution is now truly upon us, it will be interesting to see how the entire automotive industry adapts to such a monumental change.