GM, Tesla, Barra discussed on Business Wars
It's early 2013, Ed GM's design center in Detroit. Mary Barra is General Motors executive vice president of global product development, charged with developing GM's EV efforts. She looks out on a group of her top designers and engineers. Okay, people. We have a tremendous opportunity to dominate the EV market. But we're going to need a lot of brainstorming to get there. GM is recovering from bankruptcy and Barra knows what the company is capable of. She should. She was 18 years old when she started working at GM in 1980, inspecting fenders and hoods. Barra has never worked anywhere else. Here's the breakdown of the current terrain. You've got teslas, Model S, great car, getting great press. It can get 300 miles with a single charge. A designer raises his hand. But it's completely unaffordable to the majority of EV buyers. Most people can't spend $70,000 on any car. Right. Especially in a two car family culture. On the other end of the spectrum, you have the Nissan leaf. It's just under $30,000, but it can only go about 80 miles on a single charge. Talk about range anxiety. Right. That's a customer's biggest issue with any EV. But if we can offer a car with at least a 200 mile range for around $30,000, we could own the market. As you all know, we've been developing the bolt. I want to put that into high gear. When the Chevy Volt came out in 2011, it got good notices, and established GM as a company taking EV seriously. But it didn't sell. Now, the Chevy bolt can utilize the engineering developments of the vote and potentially leap ahead. Here's the main thing. We need the boat to appeal to everybody, not just the green demographic. Meaning nothing too flashy just a solid functional car with good sized interior. Plenty of leg and headroom in the back seats. I like it. Battery life is a concern, of course. Just keep thinking about pushing to 200 miles. The meeting goes on for hours. When it's finished, Barra has solid, aggressive plans to move on GM's concept car in just two years. The same time, another new car hits the market. The Tesla Model X as 2013 begins, Tesla's CFO determines that the Fremont factory can manufacture 4750 cars in the first three months of the year. That would leave the company with a profit of $1. When Musk learns of this, he can accept it. Bottom line is that even a buck profit means he's still in business. His stock sale of 5 million shares brings in enough funding to keep the lights on, and the Model S assembly lines rolling. Meanwhile, Tesla's sales guru George blankenship has opened up 32 high concept stores around the world with dozens more on deck. He pushes his team into overdrive, assuring the order to delivery pipeline hums along at top speed. The result is remarkable. In April, buoyed by great press word of mouth and Musk's tweets and showmanship, Model S sales soar to $329 million. The CFO's prediction of a $1 profit actually balloons into 11 $1 million. It's the first quarter in the company's decade long history. It's ever turned a profit. It's 2013 at GM headquarters in Detroit. General Motors CEO Dan ackerson is sitting with a GM board member. Ackerson slaps a magazine down on a table and pushes it toward the board member. Have you seen this? Consumer report says the Tesla Model S is so revolutionary and advanced. It's like a car from a different planet. And yes, I'm quoting. Yeah, planet Silicon Valley. And that's a world away from Detroit. The magazine gives the Model S a score of 99 out of a hundred. That's the highest rating they've ever given anyone. They say it's the best car they've ever tested. EV or otherwise. Tesla's really getting their game together. The endorsement from consumer reports is tremendous. It's a not for profit publication that acts as an advocate for the consumer. It even buys its own test cars. The review shocks everyone in Detroit. When motor trend voted the Model S car of the year a few months ago, we figured that just matters to car freaks. This is different. Consumer reports matters to everybody. Yeah, and now Tesla is building charging stations from California to New York. They say they're going to make the power free for Tesla owners. The car is expensive, but this sure making it seem damn viable. But Musk is a risk taker. He's addicted to it, and he's come close to destruction before. It can happen again. Rather than trying to crush the competition. GM's move. Is to wait for Tesla to implode. Tesla is riding high. The effusive press reviews, the profits, the overall embrace of the Model S, even at a $109,000 a pop. It's all Musk has envisioned. GM CEO Dan akerson knows a threat when he sees one. He's a former naval officer with a background as an electrical engineer and finance expert. Just the man for serious recon. Ackerson is curious as hell about what makes Tesla tick. And he's going to make it his personal business. To find out. If you like our show, please give us a 5 star rating and a review and be sure to tell your Friends. The next episode will be out in a week, but you can listen to it right now, ad free by joining wondery plus. In the wondery app. You can follow this show on Amazon music, Apple podcasts, and the wondery app, or wherever you're listening right now. In the episode notes you'll find some links and offers from our sponsors. Please support them. Another way you can support the show is by filling out a survey at 1° dot com slash survey. From wondery, this is episode two of Tesla versus Detroit for business wars. A quick note about recreations you've been hearing, in most cases, we can't know exactly what was said, those scenes are dramatizations, but they're based on historical research. If you'd like to read more about Tesla, we recommend power play by Tim Higgins and Elon Musk, Tesla, SpaceX, and the quest for a fantastic future by Ashley Vance. I'm your host David Brown, Peter gilstrap wrote this story. Voice acting by Stephen foo and Michelle phillippe, Karen Lowe is our senior producer and editor, edited and produced by Emily frost, sound designed by Kyle Randall, our producer is Dave Schilling. Our executive producers are Jenny Lauer beckman and Marshall Louis created by hernan Lopez for wondering. Laundry..