My two favorite automobile manufacturer stocks are General Motors (GM) and Tesla Motors (TSLA), and it just so happens that those are the two companies that will deliver the first two “affordable” electric cars with a driving range of more than 200 miles—the Tesla Model 3 and the Chevy Bolt.
Let’s see how those two cars stack up.
Chevy Bolt
Here’s what we know about the Chevy Bolt.
It’s fully electric, powered by a 60 kWh battery pack in the floor and a 200 hp motor.
It’s front-wheel drive.
The EPA estimates it will go 238 miles on a full charge and get 119 MPGe (Miles Per Gallon Equivalent is a measurement of how far a car can travel electrically on the same amount of energy as contained in one gallon of gasoline.)
It seats five adults in a body that looks like this:
Its drag coefficient is 0.32.
It accelerates from zero to 60 mph in about 6.5 seconds.
Its top speed is 90 mph.
There is no trunk. Cargo capacity is just 16.9 cubic feet, though with the rear seats folded, storage space totals 56 cubic feet.
It has a 10.2 inch-diagonal color touch screen, along with more traditional buttons and knobs.
With the available 240-volt charging unit, the battery can be fully recharged from empty to full in less than 10 hours. In other words, overnight.
Its starting price is $37,495, which works out to $29,995 after the $7,500 federal tax credit.
And it will be available in the fourth quarter of this year, sold via existing Chevy dealers who qualify.
After test-driving a pre-production model, Car and Driver magazine praised the driving dynamics and range but criticized the interior quality as “more befitting a $20,000 car than a $30,000 one.”
Tesla Model 3
Here’s what we know about the Tesla Model 3.
It’s fully electric, but the size of the battery pack (in the floor) and the motor are secret.
It’s rear-wheel drive, with the option of all-wheel drive.
The company estimates it will go at least 215 miles on a full charge.
Its starting price is expected to be about $35,000, which works out to $27,500 after the $7,500 federal tax credit.
It seats five adults in a body that looks like this:
The Model 3’s drag coefficient will be about 0.21 (lower than the Model S drag coefficient of 0.24, which is the lowest among current production cars).
It will accelerate from zero to 60 mph in less than six seconds.
Its top speed is unknown (but probably higher then the Bolt’s).
Its MPGe is unknown.
With both a rear trunk and a front trunk, its storage capacity is certainly larger than the Volt’s, though the actual capacity is unknown.
Partly as a result of those crumple zones, it should be the safest vehicle in its class.
It has a 15 inch-diagonal color touch screen, and virtually no buttons or knobs.
Autopilot, Tesla’s self-driving feature, will be available for an extra cost.
Supercharger access will be available too (for a cost), enabling rapid charging and long-distance travel. (General Motors has no plans for providing fast-charging infrastructure for its cars.)
The Model 3 will be priced around $35,000 before the federal tax credits, though those $7,500 credits will disappear sooner for Tesla buyers than for Bolt buyers. (Every manufacturer is limited to credits for 200,000 vehicles and Tesla has a big head start thanks to its Model S and Model X. After 200,000 vehicles, the credit falls to $3,750.)
To date, Tesla has taken $1,000 deposits for nearly 400,000 cars (limit two orders per person). Buyers buy directly from Tesla, paying list price (no haggling).
But the Model 3 won’t be available until late 2017!
How They Compare
The Chevy Bolt looks like a winner, particularly for daily commuting and other utilitarian functions. It’s impressive that big old General Motors, which has an image of being slow to adapt, should be able to pull off this feat a year ahead of Tesla, which has been dedicated to electric cars for more than 10 years. Then again, it’s a sign of GM’s size and power that it was able to. Basically, the profits from GM’s massive truck-selling business paid for the development costs of the Bolt.
And now, thanks to the awesome fuel economy rating of the Bolt, which will lift the company’s fleet-average MPG, GM will be able to sell more gas-guzzling full size pickups and SUVs! Ironic, no?
And GM has done more innovation, in the way of partnerships.
Thanks to GM’s $500 million investment in Lyft (a popular Uber competitor), Lyft drivers who need a car will be able to get some of the first Bolts.
Also, Bolts will be used in GM’s new car-sharing company, Maven, the result of its acquisition of SideCar. Think of it as a competitor to Zipcar, which is now owned by Avis Budget Group.
And eventually, Bolts will be the company’s first self-driving cars, again made available through Lyft.
Bottom line: that’s a lot of cutting edge progress for a big stodgy old car company!
But Tesla Is Also a Winner!
Remember, Tesla CEO Elon Musk’s major goal is to “accelerate the world’s transition to sustainable energy.” Thus it’s great that GM is getting on the bandwagon. The mainstream image of both GM and its utilitarian vehicles will go far in persuading Americans that electric cars are “normal.”
In the meantime, Tesla has—and will maintain— a firm grasp on the premium end of the electric car market, thanks to both its pricing and its style, and is unlikely to relinquish it easily.
For buyers looking for style, The Tesla Model 3 wins.
For buyers looking for long-distance travel capability, the Tesla Model 3 wins.
For buyers looking for a self-driving car, the Tesla Model 3 wins.
For buyers looking for more cargo capacity, the Tesla Model 3 wins.
For buyers looking for the ultimate in safety, the Tesla Model 3 wins.
And for buyers looking to bypass the ordeal of haggling with a traditional auto dealer, the Tesla Model 3 wins.
Bottom line: in the end, everyone wins—except the oil companies.
Which Stock is Best?
So which stock do I like best?
Well, last week GM rallied nicely on big volume, which is great. The stock is still dirt cheap on a P/E basis, and its yield is a fat 4.8%.
On the other hand, Tesla is still the fastest growing of the two companies by far, and if it ever begins to cut back on development and innovation costs, earnings will soar.
In short, just like the cars, the stocks are two very different animals, and I can’t give you an easy answer here.
To get the full answer, you need to become a regular reader of my Cabot Stock of the Week. Then, every Tuesday, I’ll send you a brief but clear recommendation of the one Cabot stock previously recommended by another Cabot analysts that I think is best to buy today, plus updates on all previous recommendations still in the portfolio.
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