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General Motors (NYSE:GM) introduced the Chevrolet Spark EV ahead of the Los Angeles International Auto Show on Tuesday. The Spark is an electric vehicle expected to boast a range that competes with the top performers in the EV segment, 130 horsepower, and 400 foot-pounds of torque. It will also be the first EV in North America to offer an optional SAE Combo DC Fast Charge system that can charge the battery to 80 percent in just 20 minutes.
The vehicle is expected to be priced under $25,00 after factoring in a $7,500 federal tax credit.
CHEAT SHEET Analysis: Trends Support the Shift Toward Electric Vehicles
EV sales in the United States represent a small but growing portion of the total car market. In 2011 electric drive cars represented 2.23 percent of the market with a total of 266,329 sales, 10,064 of which were battery-electric vehicles.
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In 2012 through October, electric drive cars represented 3.3 percent of the market with 355,805 sales, 38,133 of which are BEVs. Where total electric drive car sales have grown by a third, BEV sales have nearly quadrupled.
Economic headwinds and concerns over gas prices are pushing more and more consumers toward EVs. New technology developed by GM and EV specialists like Tesla Motors (NASDAQ:TSLA) have made it possible for electric vehicles to fully compete with traditional combustion-engine vehicles.
How will the Chevrolet Spark Help GM Capitalize on this Trend?
The Spark’s expected sticker price clocks in below competitors like the Nissan (NSANY.PK) Leaf, which starts at $27,700. The Spark will also offer an all-electric range comparable to Ford’s (NYSE:F) electric Focus Sedan, which can go 76 miles on a charge.
While mass market EV adoption may be a few years away, GM is competently positioning itself to take advantage of growing anti-gasoline sentiment. To coincide with the Spark debut, the company announced that it will be ramping up its EV development in China where GM has been seeing record sales recently.
How Will This Affect GM’s Stock?
The introduction of the Chevy Spark, set to hit dealer lots in the summer of 2013, is not likely to turn the market on its head. Early information suggests the vehicle is a solid contender in a market that is being rapidly populated.
The Spark will help solidify GM’s presence in the EV market and has the potential to generate substantial long-term sales in markets like China if early investment pays off. No word yet if the Spark will make its way to China, but pure EVs are in the company’s game plan for the country.
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