Tesla's Newest Electric Car Has the Buzz, but GM Has the Real Shocker


General Motors sold 9.8 million cars last year, while Tesla Motors sold a little over 50,000. It might not be fair to compare these companies—Tesla has just 13,000 employees, as opposed to GM's 216,000. But the stock market puts the two in roughly the same ballpark. Tesla, with its niche market of luxury electric vehicles, has a market capitalization of about $35 billion, while GM's is $45 billion.

You explain that how? Investors like to bet on the upstart. Tesla is pushing new technology with the power to change how we all drive, while GM is the biggest player in moribund Detroit. But the fact is GM is about to enter Tesla territory and will reach its mark first.

While electric vehicles have hitherto been the playthings of those willing to pay a premium to be environmentally conscious, the next round of non-gas cars is aimed at the regular car buyer. GM's Chevy Bolt, a car that promises the 200-mile range experts have long said consumers need for mass adoption of alternative fuel vehicles, is due out this year at a cost of $37,500.

Tesla's answer to this is the Model 3, the massively hyped car it unveiled in April at an event that rivaled the buzz of peak Steve Jobs at Apple. CEO Elon Musk said he was reasonably sure the car would be ready for market by the end of 2017. That's a full year after the Bolt is scheduled to arrive in driveways. Musk is hoping to deliver a zippy car with a range of at least 215 miles for $35,000, though he said optional features will push the average sale price closer to $42,000.

With 276,000 preorders in the first two days, the Model 3 is already the most popular electric car ever made and, assuming the vehicles can all be delivered in 2017, Tesla will be on the bumper of the best-selling cars in the country, the Honda Accord and Toyota Corolla and Camry, which are bought over 330,000 times a year.

At the Model 3 event, Musk said he keeps getting asked one question over and over: "Can you fit a 7-foot-long surfboard inside it?"

"The answer is yes." Because of course it is.