It’s Official: General Motors Sees Tesla As A Threat; “If we ignore it and say it’s a bunch of laptop batteries, then shame on us.”

It’s Official: General Motors Sees Tesla As A Threat


“History is littered with big companies that ignored innovation that was coming their way because you didn’t know where you could be disrupted.” General Motors will be hoping those words, from vice chairman Steve Girksy as the automaker begins to study electric upstart Tesla Motors [NSDQ:TSLA], don’t become too prophetic. They’re a clear indication that major automakers are starting to worry about the startup electric automaker, as GM CEO Dan Akerson looks into how Tesla may affect the 104-year old GM’s business. According to Bloomberg, studying Tesla is just one way that Akerson is hoping to change GM’s culture after its financial difficulties in 2009.The world economic crisis and the big bailouts required as a result of it shook the major U.S. automakers out of a complacency that had let them fall behind rivals from overseas–and improvements from the Big Three are already apparent as quality, performance and efficiency climb inexorably upward.

Several internal processes at GM have changed since Akerson took the reins, but improving the company’s future means improving its products too.

Most important from a technology perspective is continued development of the Volt–the next generation of which could arrive in 2015 or 2016, according to Akerson. Reducing cost will be a major hurdle to overcome, with engineers working to cut as much as $10,000 from the cost of each car.

While the Volt currently undercuts Tesla’s Model S by quite a margin, rumblings of a more compact, more affordable Tesla sedan mean GM can’t afford to sit around. Even this year, first-quarter Model S sales were higher than Volt sales.

It’s a car intriguing GM, and no doubt plenty of other automakers too.

“In the old days, they would’ve said, ‘It’s a bunch of laptop batteries and don’t worry about it and blah, blah, blah,’” Girsky told Bloomberg, referring to GM’s old methods.

Now though, things are different. “I don’t know if [the Model S is] going to work or not work. All I know is if we ignore it and say it’s a bunch of laptop batteries, then shame on us.”

The subtext? Modern GM probably wouldn’t have crushed hundreds of examples of its most innovative vehicle. With Tesla Motors around, it simply can’t afford to.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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