NBA superstar Charles Barkley made a now-legendary comment prior to the US Olympic basketball Dream Team playing Angola in 1992.
"I don't know anything about Angola, but I know they're in trouble," Barkley quipped. The US went on to win by 116-48.
Tesla isn't the automotive equivalent of Angola, but at times I get the sense that General Motors considers itself the Dream Team: the car company that symbolizes US manufacturing might.
Both Tesla and GM have been to hell and back since the financial crisis. Tesla nearly went bankrupt in 2008, but was saved by a last-minute funding round on Christmas Eve. And GM did go bankrupt in 2009, after being bailed out by the federal government.
Fast-forward to 2016, however, and Tesla has a market cap of $40 billion and GM has been raking in cash for two solid years amid an SUV sales boom in the US. While both companies have bounced back, there's no question that GM is better positioned financially to compete in the mass market EV space.
Staggering cash burn
Tesla is burning through impressive amounts of cash as it gears up to launch its Model 3, the company's first mass-market vehicle, later this year. Last week, the company announced a new capital raise, to get another billion in the bank as it commits to spending $2 billion or more in 2017.
GM also spends plenty of money, but according to Dan Ammann, the automaker's President, it's bringing in a billion a month. What's more, the company's recent sale of its European Opel division, for about $2 billion, means it can also reduce its balance-sheet cash cushion to $18 billion from $20 billion.
Being basically cash-flush means that GM can take some huge risks. And that's what it did when it committed to bringing its own mass-market electric car to market a full year ahead of Tesla's $35,000 Model 3.
Read more:
http://www.businessinsider.com/the-chevy-bolt-is-a-serious-tesla-competitor-2017-3
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