The goliath of the U.S. auto industry is taking on the new David. Media reports say General Motors is developing an electric car that will offer double the driving distance of the current generation. And that 200 mile range on a single charge would be similar to that of a Tesla, but at a fraction of the cost - $30,000. A Tesla Model S, which delivers up to 225 miles, costs around $70,000.

GM is trying to address two problems that plague electric vehicles: high prices due to battery costs and short distances. That has kept consumers from flocking to them. Battery-powered cars account for just a fraction of a percent of domestic sales. GM currently produces two battery-powered cars: the $35,000 Chevy Volt plug-in hybrid that can go 35 miles and the electric $27,000 Chevy Spark that goes 82 miles.

GM's stock rose slightly on the news while Tesla's hot-flying shares, which have quintupled this year, eased back.

GM is not saying when it can deliver the new electric car. So it's possible Tesla could beat them to the finish line. Last month, Tesla CEO Elon Musk said it's working on a cheaper model for the masses that's on track to launch in 2016. He says it'll cost $35,000 with a range of 200 miles. That sounds a lot like the one GM is working on.