Tesla CEO Elon Musk's influence grows as automakers roll out electric-vehicle plans at Detroit auto show

Key Points
  • Volkswagen is investing $800 million and hiring about 1,000 workers for a new plant in Chattanooga, Tennessee, for its electric car lineup.
  • Ford is actively developing its electric vehicle plans with 16 "electrified" models in the works and "a very big surprise" coming next year.
  • General Motors showed off its all-electric Cadillac for 2021.
Tesla CEO Elon Musk and Shanghai's Mayor Ying Yong attend the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019.
Aly Song | Reuters

Tesla may not be at this year's North American International Auto Show, but it's easy to feel the influence of Elon Musk's company on the automakers unveiling new vehicles in Detroit.

From announcing all-electric cars to adding assembly lines specifically for plug-in models, auto executives are ramping up their electric vehicle plans.

"There's no doubt, the auto industry is becoming much more serious about developing electric vehicles driven by the need for emissions compliance in the U.S., China and Europe," said Michael Robinet, analyst with IHS Markit. "Tesla has shown the industry that markets do exist for electric vehicles, and the major players have taken notice."

Robinet says the early success of the Model 3 shows there is demand for all-electric vehicles. Until last year, U.S. sales of plug-in models were growing, but limited.

In 2017, the auto website Inside EVs estimated the top-selling electric model in the U.S. was Tesla's Model S, with sales of approximately 27,000 vehicles. In 2018, Inside EVs' estimates Tesla sold just under 140,000 Model 3s in the U.S.. Tesla does not release sales by country.

The surge in sales for the Model 3 clearly demonstrates there's a larger market for an all-electric vehicle, even if it comes at a higher price. The average Model 3 sells for roughly $50,000.

Cadillac President Steve Carlisle admits he "obsessively" benchmarks and studies Tesla.

"They have done a lot to popularize electric vehicles and to get into the minds of consumers," Carlisle told CNBC after giving reporters an early glimpse of the all-electric Cadillac being developed.

Members of the media look at General Motors 2020 Cadillac XT6 SUV after it was revealed on the eve of press days of the North American International Auto show in Detroit, Michigan, January 13, 2019.
Rebecca Cook | Reuters

Carlisle's public comments about Tesla are noteworthy. For years, auto executives have privately scoffed when asked about Musk and rarely did they publicly acknowledge the growing sales and success of Tesla. Not anymore.

While executives may be more willing to admit Tesla's success, many believe they can ramp up their EV sales to rival, if not exceed, Tesla.

Ford CEO Jim Hackett says the electric models it's developing are "going to appeal to car owners and car lovers."

Carlisle cautions that it's premature to say Tesla is the winner of the EV race. "I think we ought to wait a while to write the whole story because we don't know what happens when EVs really start to scale," he said.

Both executives have a point. Last year, U.S. consumers bought just over 360,000 EVs, just 2 percent of all vehicles purchased in the country. In other words, it's early, but Tesla and Musk are clearly influencing the thoughts and actions of automakers looking to catch up in the world of EVs.

_ CNBC producer Meghan Reeder contributed to this report