Tesla Will Soon Face Competition, Or Not

By · July 23, 2013

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.

Comments

· · 1 year ago

Until there is a BEV that can go 200 miles in range and does 0-60 under 6 seconds and seat 5 people for the $70k or less , there is no competition yet.

· · 1 year ago

The only competition for the Tesla Model S is the Tesla Model X.

If I had $20k more sitting around I'd be buying a Tesla. The biggest question in my mind at that point would be, "Which one!?" Not, "What other BEVs are out there?"

· · 1 year ago

P.S. When does the Tesla Blustar come out? The 30-40k market really needs a Tesla!

· · 1 year ago

I'm very interested in the i3 and I think it will sell well. At $42K, It will probably take most of it's sales away from the Volt and LEAF. But, it could also poach some sales from the very expensive Models S. The other luxury EVs mentioned above seem more like niche products and they probably won't pose a volume threat to Tesla.

Three or four years from now, the competition will be intense, with EVs from VW, Audi, Kia and many more. I believe Tesla really needs to speed up delivery of the Gen III, because 2017 is a long way off and most people can't afford $80K cars. The real question is, how soon will the technology be available to produce the Gen III with a good price and range?

· · 1 year ago

Maybe if DetroitElectric got its EV Evora Lotus program in gear, then there would be some competition: The new Roadster against the Model S. For the moment though, the DE is a bit overpriced.

· · 1 year ago

For now, the BMW is mainly just raising FUD. It is about a year before it actually starts hitting the streets.

· · 1 year ago

The i3 might not hit the streets in the US for a year, but it certainly will in Europe.
There are other countries as well as the US, and you don't actually fall off the edge of the world if you go outside them.
I reckon that the reasonable, for a BMW, price, the RE countering range worries and the exemption from the congestion charge will make the i3 a hit in London, where it is due for release in November, the same time as in Germany.

· · 1 year ago

At present the closest competition to the Model S would be the Volt but it doesn’t offer five seats like the Tesla, which can even be equipped with two additional seats. So apart from getting rid from its battery central section that precludes the fifth seat the Volt would just need to have a little more battery energy. So it really comes to a more compact and better battery. Alternatively, the battery technology could remain as is but the central part would need to move to the engine compartment where it could fit if the engine was reduced in size by replacing it with a pure serial generator that would allow the removal of the clutch and gearbox. If done so, the remade Volt would be a more competitive product then the Model S.

· · 1 year ago

Are any of the PHEVs mentioned in this article really competition for Tesla?

This isn't a rhetorical question - I'm curious to know. It seems to me that most, if not virtually all, Telsa owners bought it because it is a pure EV with a good range. Why compromise and get a hybrid, even if that hybrid can go 20-35 miles before the gas engine kicks in?

Sure the Volt competes well as a PHEV because at that price range none of the competitors top 100 miles in range. So, buyers in that price range have to either compromise by accepting limited range or accepting a gas engine with their PHEV. But that situation doesn't apply to Tesla.

I suggest that the Porsche and Mercedes PHEVs will compete with other gas luxury cars. And probably compete well - luxury hybrids have always been iffy because the resulting gas mileage improvements aren't that good. However, with PHEVs there is significant gas mileage improvement.

The Caddy will probably appeal to the upper end of the Volt market and the BMW to the upper end of the LEAF market, but neither is in the Tesla space.

· · 1 year ago

The cars that compete with the Tesla Models S on size and amenities and quality are the S Class Mercedes and the 700 Series BMW's and the A8 Audi and the big Lexus, and even Maserati and Bentley.

But none of those cars are really in the same level of performance.

And the Model S is about 2X as efficient as a Prius.

In my opinion, the Tesla Model S is in a class by itself. It is the halo car for all EV's - and all EV's should be working as hard as they can on increasing their range.

Neil

· · 1 year ago

There is nothing on the horizon that competes with Tesla. The super charger network alone sets Tesla so far ahead of the competition that nobody else stands a chance. Tesla is the car everybody wants. Even at my office filled with "Global warming is a left wing conspiracy" people you regularly hear people talking about wanting a Tesla.

· · 1 year ago

Yes, Tesla has an almost unbeatable car with emphasis on "almost". The plug-in Prius, with it's paltry 13 mile AER, should not be competition for the Volt with 38 miles AER and yet PIPs are being purchased by some people.

· · 1 year ago

I read about new EVs everyday. It's hard for me to believe that these are real attempts to compete with Tesla. They all seem content with an electric range between 10 and 80 miles, when all current Telsa offerings are over 200 miles.

I think that these vehicles are mostly designed to comply with California standards, so the company's can continue to sell cars there. They are all very weak and will take nothing from Telsa.

Gas and oil must have some kind of influence over big car manufacturers. It's the only logical explanation for how Telsa out- engineers bigger companies with deeper pockets and more experience.

Nissan, why haven't you come out with an EV that has over 200 miles per charge? Anyone, why is there no Minivan EV yet?

If the big car makers continue to ignore Telsa, an offer weak competition, Telsa will end up dominating the market quicker than anyone imagined.

It'll be like Apple surpassing Microsoft, or Samsung dominating blackberry in the cell phone market.

· · 1 year ago

Heh. Considering that the Model S is currently beating the pants off of *every* car in its market segment (namely, sedans in the $60-80,000 range), I don't even see how you could say something like that. They're already competing head-to-head with *Mercedes* and beating them in terms of build quality, creature comforts, trunk space, and pure motoring bliss with instant, smooth, and quiet acceleration whenever you want it. And have you see the *floor* in these cars? It's perfectly flat! Like your living room! You don't realize how awkward a normal car floor is until you're sitting in one of these.

· · 1 year ago

"how Telsa out- engineers bigger companies with deeper pockets and more experience."

Well, most automakers aren't willing to lose money in car segaments, especially the ultra-expensive luxury market.

So, even Tesla is NOT making profit on the model S yet.

Its recent qtr profit was mostly due to "CARB credits"....

But if Tesla can prove that BEVs will make money in the long term, then I am sure the major automakers will easily jump onboard to come out with their own version.

Remember that whoever owns the next generation battery technology own the EV market.

Tesla doesn't have any IP on the battery cells, only the battery packaging..

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