Feb 29, 2016 07:48 AM EST

GM Fights Tesla Motors Over The First Mass-Market Electric Car

Law makers of Indiana have tabled a bill that calls for the withdrawal of the retail license of Tesla Motors in the state. According to a report, the bill, backed by Tesla's rival General Motors, is showing that the electric car maker is encountering increasing pressure from rival automakers.

Established auto manufacturers are now considering the Palo Alto, Calif. EV maker as not just a mere curiosity, but a legitimate competitor.

GM, the biggest carmaker in the country, which in one week produces more cars than Tesla could make in one year, did not previously view the electric car maker as a threat. The upstart was making $70,000-and-up Tesla Model S electric cars for wealthy loyal customers which numbers are really quite small, compared to GM's millions of car buyers.

But Tesla's direct-to-consumer approach may be worrying the biggies. Elon Musk, Tesla Motors CEO, uses limited small retail showrooms and an online-store to supervise his supply chain in addition to creating a new customer experience.

Musk builds his EVs on demand, with clients ordering their electric vehicles online or at the retail shops and have the cars delivered to their homes. Every Tesla car is customized negating the construction of a big parking lot.

In addition, almost all checkups, repairs and updates are done online with downloads over-the-air to the owner's car, just like how it is done with cellphone updates. Normal services such as oil change are eliminated because the car's engine is electric not gasoline or diesel.

And now, Musk is about to release his cheapest model, the Tesla Model 3, which would be in direct competition with GM's Chevrolet Bolt. This car will sell at $37,500 and has a 200 mile range between charges. It is slated to go into production in late 2016.

"GM believes that all industry participants should operate under the same rules and requirements on fundamental issues that govern how we sell, service and market our products," explained a GM spokesman regarding its apparent move to restrain Tesla's entry into mass-market cars.

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