�David Welch

Fight­ing for the Socket

Bloomberg Businessweek (North America) - - Companies / Industries -

Chevy Bolt at the end of this year and Tesla be­gins sell­ing the Model 3 in 2017. GM showed off the Bolt in Jan­uary, and Tesla un­veiled the Model 3 on March 31.

GM is po­si­tion­ing the Bolt to sell to the masses, which will help the com­pany meet reg­u­la­tory targets for re­quired zero-emis­sion ve­hi­cle sales, and to high­light tech­nol­ogy GM de­vel­oped with its first elec­tric car, the EV1, in­tro­duced in 1996. When GM stopped EV1 pro­duc­tion in 2002, Toy­ota be­came the dar­ling of green-friendly buy­ers with its Prius hy­brid. Tesla, mean­while, is look­ing to the Model 3 to prove it can sell bat­tery-pow­ered cars to a mass mar­ket and turn a profit.

Both cars will start at $30,000— or less af­ter fed­eral tax cred­its of $7,500 are ap­plied. And both go at least 200 miles on a fully charged bat­tery. The Bolt is a five-pas­sen­ger hatch­back that boasts cargo space and more legroom for rear pas­sen­gers—frontseat backs are an inch thin­ner than in most cars. Tesla has kept de­tails un­der wraps, but the Model 3 is ex­pected to be about the size of a BMW 3 Se­ries.

At the Con­sumer Elec­tron­ics Show in Las Ve­gas in Jan­uary, GM Chief Ex­ec­u­tive Of­fi­cer Mary Barra, de­scrib­ing the Bolt’s virtues, said, “Bolt cus­tomers won’t have to drive to an­other state to buy, ser­vice, or sup­port their ve­hi­cle.” Tesla own­ers out­side Cal­i­for­nia must some­times travel long dis­tances for main­te­nance and re­pairs; the com­pany has fewer than 100 stores na­tion­wide, while Chevy has 3,000 deal­ers.

In Fe­bru­ary, Tesla CEO Elon Musk said he wel­comes the Bolt to the mar­ket, but doesn’t see it as a ri­val. “You should think of the Model 3 as sort of re­ally com­pet­ing in kind of the BMW 3 Se­ries or Audi A4 mar­ket,” he said. Musk has suc­cess­fully tar­geted lux­ury brands such as Audi, BMW, and even Porsche with the Model S, Tesla’s first full- size EV, which hit U. S. streets in 2012. It now starts at about $75,000 and can go well be­yond $100,000.

Chevy will mar­ket the Bolt on its value and prac­ti­cal fea­tures. “Friv­o­lous gad­gets” won’t cut it, says Darin Gesse, mar­ket­ing man­ager for elec­tri­fied ve­hi­cles at GM. Are the fal­con-wing doors on the Tesla Model X friv­o­lous? “They’re in that neigh­bor­hood,” he says. Musk has said that the doors aren’t just for show; open­ing up­ward, they make it eas­ier to get in and out of the car.

Tesla first pushed its cars as sporty and unique, and then as elec­tric and green, says Alexan­der Ed­wards, pres­i­dent of San Diego mar­ket­ing con­sul­tant Strate­gic Vision. That’s why sales have in­creased even as cheap fuel has bat­tered hy­brid-elec­tric cars like the Prius. De­spite the com­pa­nies’ dif­fer­ent mar­ket­ing ap­proaches, Ed­wards says, the 8 per­cent of new-car buy­ers in­ter­ested in an elec­tric car will look at both the Tesla and the Chevy mod­els. brand op­er­ates out­side the U. S. In Asia, where con­sumers place a premium on all­nat­u­ral, gen­tle- on­the- skin beauty prod­ucts, Burt’s Bees has great ap­peal. “They’re us­ing less chem­i­cals than some of the lo­cal brands here,” says Lee Jee Ha, who shops for her Burt’s Bees fa­vorites, es­pe­cially its baby oil, at any of sev­eral Seoul branches of South Korea’s Olive Young drug­store chain. Burt’s Bees is also found in up­scale depart­ment stores such as the U.K.’S John Lewis and some drug­store chains in Lon­don. At a time when large con­sumer­prod­ucts com­pa­nies are strug­gling with slug­gish sales, Burt’s Bees and the premium prices it com­mands overseas rep­re­sent growth po­ten­tial for Clorox. “This is a very prof­itable busi­ness in­ter­na­tion­ally,” says Chief Ex­ec­u­tive Of­fi­cer Benno Dorer. The com­pany, best known for its bleach and Hid­den Val­ley ranch salad dress­ing, bought the small, Maine-based maker of lip balms and honey-in­fused creams and cos­met­ics for $925 mil­lion in 2007. At the time, the line was sold in five coun­tries out­side the U. S.; now it’s in more than 40. It en­tered half of those mar­kets in the last three years, Dorer says. The new­est in­ter­na­tional

U.S. sales of plug-in elec­tric ve­hi­cles*

Telsa Tesla

GM Ford

GM

Other Nis­san

Other

120k

90k

60k

30k The bot­tom line GM and Tesla have a lot rid­ing on the re­lease of their new­est EVS, as both com­pa­nies go af­ter the mid­dle mar­ket. Burt’s Bees fetches higher prices abroad Rose­wa­ter toner In the U.S. → In Korea Peach & wil­low bark deep pore scrub U.S. → Hong Kong Baby Bee bub­ble bath U.S. U.K.

$8 $26.95

$9 → $15.84

$11 $31.27

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