Tesla Will Soon Face Competition, Or Not
Tesla Motors is on a roll. Its stock price is flying high, and it continues to enjoy high-profile media coverage. Tesla executives recently disclosed that the company is building more than 400 Model S units a week, and that by late 2014, its Fremont, Calif. plant will be able to churn out about 800 units per week. The company’s path to long-term success appears to be smooth and clear—except maybe for one thing: over the course of the next year, the Model S will for the first time have what could be legitimate competition for luxury buyers wanting a battery-powered vehicle.
In 2014, new plug-in models from BMW, Mercedes, Porsche and Cadillac will hit the market. None of the models from these luxury brands have exactly what the Model S has—in terms of style, size, range, performance and highway-based charging for road trips. And many of the details about these cars—most notably the quantity of production—are still unknown. Nonetheless, this question looms: Will the plug-in versions of the Porsche Panamera or Mercedes S-Class rob even a single customer away from Tesla? How about the BMW i3 or Cadillac ELR? And if so, could it slow down the pace of Model S sales, well before Tesla’s next models come online?
- The Porsche Panamera S e-hybrid has a top speed of 167 miles per hour. (When running in EV mode, the top speed is limited to 84 m.p.h.) EV range is about 21 miles. As a plug-in hybrid, it can be refueled at any gas station in about five minutes—without being taken off-course to find a Supercharger.
- The Mercedes S-Class sits on top of the food chain for luxury automobiles. The new 2014 S-Class will have a plug-in option, granting around 80 or 90 miles per gallon efficiency. It goes on sale in the third quarter of next year, although there’s no guarantee that it’s coming to the U.S.
- The performance specs of the Cadillac ELR, such as 207 horsepower, are mild compared to the Model S. But it’s likely to be priced tens of thousands of dollars less than the Tesla. The 35 miles of all-electric range, and more than 300 miles of total range, is considerable—especially packaged in a car with the attractive neo-muscle design of the ELR.
- Yesterday, BMW announced a pre-incentive price of $42,275 for the all-electric i-3 city car. That’s a good price. Okay, it’s not in the same segment as the Model S, but there are many Bimmer-loyalists who will want to spend about half as much as they would on a Tesla to get an innovative all-electric urban commuter with a kidney-shaped grille. It will be fascinating to see how BMW design and technology will look and feel in a small carbon fiber EV—a curiosity that could lure at least a few luxury buyers that don’t want or need a car as large as the Model S.
That’s the rough shape of the upcoming competition for the Model S. Maybe those new models will be produced and sold in relatively low numbers—only expanding the market for plug-in models, rather than taking anything away from Tesla. Maybe well-heeled buyers will forever see Tesla as the ultimate EV brand. Regardless, a new era is looming for luxury EV buyers—one in which customers will have to pause, even if momentarily, to consider how Tesla vehicles stack up against other cars that use electricity as fuel.
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