Summary
GM is taking a practical approach to expanding its electric vehicle product technology and consumer experience in a market where there is limited existing infrastructure that favors fossil fuels over electric vehicles.
Analysis
GM's agreement with REVA is an exercise in practical business thinking. REVA is already building electric cars AND they are located in an "emerging market" where the traditional fossil fuel-based infrastructure is not well developed. This provides the freedom for new auto products to develop quickly and to grow in response to consumer demand without the competition and limitations that exist in more well-developed countries. Another example of this would be the cell phone and WIFI explosions in China. Due the lack of "land lines" consumers quickly adopted wireless communications rather than wait for a hard wired infrastructure to develop. With this agreement GM has some access to developed electric vehicle powertrains and to the consumer experience of dealing with batteries and charging infrastructure that will develop much more slowly in developed markets.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
