Because we own Tesla stock for our clients, I listen in on the quarterly conference calls for Ford and GM to learn about their plans for electric cars. It has long bothered me that I could not make sense of these companies plans which never seem to get past the concept stage. After much discussion with people who know the auto business better than me, I think I see the rationale behind Ford's and GM's strategy, and my confidence in Tesla has grown. Here's why.
The Mass Market
While Tesla strives to make the Model 3 more affordable, both Ford and GM don't make money selling mass-market sedans. Ford has already exited this market segment and GM is not far behind. I can see why neither company is in any hurry to invest the billions it would take to make an electric mass-market sedan.