By William Boston
For the past five years, Tesla Inc. has owned the market for
luxury electric vehicles. That is about to change.
Jaguar, the iconic brand now owned by India's Tata Motors Ltd.,
will start selling I-Pace, its first all-electric model, in August,
the first shot in a battle between Tesla and old-guard auto makers
for the premium electric-car market.
Other brands such as Audi, Porsche, Mercedes, BMW will follow
shortly after with their own electric lineups and even Bentley and
Rolls-Royce are making electric plans.
And the premium market is just the head of the spear. In the
next five years, the world's leading manufacturers will invest some
$105 billion to build and roll out 75 new battery-electric and
plug-in hybrid models by the end of 2022, according to automotive
research group Frost & Sullivan. By 2025, there could be nearly
500 new electric models on sale, accounting for one in five new-car
sales world-wide.
"Customer perception is at a tipping point," Wolfgang Ziebart, a
former BMW executive who designed Jaguar's I-Pace, told reporters
at a preview of the car in Portugal. "Customers had a lot of
reservations in the past -- range, charging. And these are about to
be resolved now."
Jaguar and Audi have been in a fierce a PR battle to win the
moniker of first non-Tesla premium electric car on the road.
"Every now and then a car comes along that can build your
business and your brand and the I-Pace is one of those," says
Finbar McFall, head of product marketing at Jaguar Land Rover.
Jaguar has been taking orders for the I-Pace, which starts at
about $69,500 in the U.S. with a six-month waiting list. It is
nearly five meters long and sports the Jaguar's luxurious leather
interior, steering wheel and bucket seats. It has the interior of a
large SUV but takes up much less space bumper to bumper, thanks to
the absence of an engine up front.
Audi has been teasing images of its e-tron, which even under its
camouflaged paint to hide its street-ready appearance looks a lot
like its Q5 SUV, sporty and masculine. Online, Audi is running
videos with Daniel Brühl, a well-known actor in Germany, and plans
a splashy launch at its electric-vehicle factory in Brussels next
month, though the e-tron won't hit the streets until late fall in
Europe at the earliest. Audi plans a big bash to send off the
e-tron in the U.S. later this year, but is keeping details under
wraps.
Premium cars, while a fraction of the total number of vehicles
sold world-wide, is a high-margin, highly profitable business,
largely dominated by the likes of Daimler AG's Mercedes-Benz, BMW
AG, Volkswagen AG's Audi, Porsche, Aston Martin, Jaguar Land Rover
and Toyota's Lexus.
This is the market Tesla attacked in 2012 when the company
founded by Elon Musk launched the Model S, a Mercedes-killing
luxury electric sedan. Tesla accounted for 10% of the 1.2 million
plug-in electric vehicles sold world-wide last year.
While Tesla proved there was a luxury market for electric
vehicles, traditional luxury car makers long ignored the challenge.
Now they say they can no longer afford to.
"There is a new jump ball at the table for all luxury vehicles,"
says Scott Keogh, the head of Audi of America, adding that the
winner will be the car maker that can combine a great car with the
digital ecosystem around it.
Porsche is putting the final touches to an electric-car factory
-- one of 16 to be built by Volkswagen and its eight car brands
over the next few years -- to build the Taycan, its first
all-electric car. The Taycan prototype has been spotted on the
Nurburgring racetrack, a sleek ground-hugging sports car that
resembles the stately Panamera. Its starting price, Porsche
officials have said, will be around $75,000, slightly lower than
Tesla's Model S.
The car, slated to begin production at the end of next year,
uses technology from one of Porsche's Le Mans racing hybrids.
Detlev von Platen, Porsche board member in charge of sales, says
that the hybrid version accounts for 60% of Panamera sales in
Europe, a sign even Porsche customers are eager to buy electric
cars.
"The important thing is you have to have the feeling that you
are driving a Porsche," he says.
Porsche went to extremes to build the car at the same factory
where all of it original sports cars were made in Stuttgart's
Zuffenhausen district, building new roads to make room for more
than 1,400 new employees.
Mercedes aims to produce the first car under its new EQ subbrand
next year and plans to launch 10 battery electric cars by 2022.
BMW, a pioneer with its i3 compact electric vehicle a decade
ago, next year will launch an all-electric version of its Mini
brand, an all-electric X3 SUV in 2020 and its new flagship -- the
full-electric iNEXT, which will also include advance self-driving
and connectivity features.
"Tesla risks losing its leadership," says Mark Wakefield, an
automotive consultant at Alix Partners.
Tougher emissions regulations are a big driver of the upcoming
battle as they make it more expensive to develop conventional
vehicles. Regulators in China and in some European countries have
also begun taking steps to ban some conventional vehicles.
Audi's Mr. Keogh says the shift toward electric cars plays to
the core strengths of the traditional premium brands. A decade ago,
the top premium brands developed sport-utility vehicles, which
provided a massive boost to sales and doubled the size of the
premium market.
"The electric car is the new stimulus for luxury brands," he
says. "People who buy luxury vehicles have one thing in common --
they don't want to be left behind."
Tesla has also stumbled recently. Its self-driving autopilot
feature has come under scrutiny after a driver was killed in a
crash while using the system. Sales of its flagship Model S are
down 19% in the first quarter, while sales of its Model X SUV are
flat, according to EV-Volumes.com, which said overall sales of
plug-in electric vehicles were up 58% in the quarter, after rising
65% world-wide in 2017.
Production of the Model 3, Tesla's first mass-volume electric
car, has been woefully behind schedule, providing an opportunity
for rivals. And Tesla's Mr. Musk has all but abandoned the idea of
selling the Model 3 at a low mass-market price of $35,000.
Steve Kalafer, founding chairman of Flemington Car & Truck
Country, a network of dealerships in New Jersey, has been getting
ready for the moment when consumers have more choice of electric
cars, outfitting its locations with electric charging stations and
preparing to send technicians to Porsche for training in the
fall.
Mr. Kalafer credits Tesla with creating the electric-car market.
But as traditional brands get into the act, he sees it eventually
losing its aura of its exclusivity.
"This is the first time that the manufacturers are genuinely
serious about electric cars," he says. "In five or six years, Tesla
will be a fascinating car that is no longer unique in a group of
fascinating cars."
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
June 22, 2018 10:14 ET (14:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Tesla (NASDAQ:TSLA)
Historical Stock Chart
From Feb 2024 to Mar 2024
Tesla (NASDAQ:TSLA)
Historical Stock Chart
From Mar 2023 to Mar 2024