Can The Bolt Take Down Tesla's Model 3?

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General Motors Company GM will start building the Chevrolet Bolt electric car from Oct 2016, per Reuters. The car should be sold from 2017, which will put it in direct competition with Tesla Motors Inc TSLA highly anticipated third-generation electric car, Model 3, which is expected to be unveiled in 2015 and launched in 2017.

General Motors unveiled the Chevrolet Bolt at the Detroit auto show in January. It will be produced at the carmaker's small-car plant in the Orion Township near Detroit with an annual production target of 25,000–30,000 units, per Reuters. Will the car provide stiff competition to Tesla's Model 3? Let's take a look.

Chevrolet Bolt vs Tesla's Model 3

While the common launch year of the electric cars is enough to spur competition, it is worth noting that both cars will have a range of 200 miles per charge. Moreover, Chevrolet Bolt is being touted as "an affordable solution" for the electric car market. This immediately brings into mind Tesla's aim of developing an affordable electric car, which is being realized through the Model 3.

However, General Motors gains an edge in terms of affordability as the Chevrolet Bolt is expected to have a starting price of $30,000. In comparison, Tesla's Model 3 will cost around $35,000, excluding tax incentives.

On the other hand, Tesla is an established player in the electric car market, while General Motors' last fully electric car was the EV1, sold in the 1990s. The latter's recent forays with electric vehicles is limited to hybrids such as the Chevrolet Volt, which uses a combination of electricity and gas to run.

Moreover, Tesla is known for its stylish and high-performing luxury products. The Vice President of vehicle engineering at Tesla, Chris Porritt, also a former chief engineer of Aston Martin – the British manufacturer of luxury sports cars – is designing the Model 3, raising hopes of an impressive vehicle. Based on Tesla's other vehicles, it is expected that the Model 3 will surpass Chevrolet Bolt in terms of style and features. Thus, a full comparison of the vehicles can only be done once the Model 3 is unveiled.

The Third Wheel

Nissan Motor Co. Ltd.'s NSANY Leaf EV can emerge as a competitor for both the Chevrolet Bolt and Model 3. While Nissan Leaf, priced at just $22,000, currently has a low range of 84 miles per charge, we can expect significant improvement by 2017. If its range comes close to 200 miles by then and the price is not a disadvantage compared with the other two vehicles, the Chevrolet Bolt and Model 3 will have a stiff contender.

Zacks Rank

Tesla currently carries a Zacks Rank #2 (Buy), while General Motors carries a Zacks Rank #3 (Hold). Daimler AG (DDAIF), with a Zacks Rank #1 (Strong Buy), is a better-ranked stock in the auto sector.