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September 4, 2018

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German automakers take on Tesla

Mercedes-Benz is set to unveil its much-anticipated electric SUV today, marking the start of a German onslaught against Tesla鈥檚 dominance of the fast-growing market for premium battery cars.

Daimler-owned Mercedes, BMW and Volkswagen鈥檚 Audi and Porsche divisions are all gunning for the US$52 billion Californian upstart, with early publicity efforts emulating its tech-industry halo.

The market for upscale electric cars is Tesla鈥檚 to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 cars this year and almost double that in 2019.

The Mercedes EQC 鈥 whose launch program in Stockholm features yoga in a direct appeal to the Millennials who have flocked to Tesla 鈥 is the first production model under the carmaker鈥檚 electric EQ sub-brand. It will be closely followed by similarly hyped debuts for BMW and Audi.

鈥淲hile Tesla currently has a strong hold on the luxury electric market, I don鈥檛 think this will be the case after the arrival of the German premium offerings,鈥 said Wajih Hossenally, an automotive powertrain analyst with IHS Markit.

鈥淭esla has virtually zero competition 鈥 but this will change from 2019 onwards.鈥

Rival forecaster LMC Automotive agrees, predicting a steady decline in Tesla鈥檚 share of an exploding electric-car market over the next decade, from today鈥檚 12.3 percent to 2.8 percent, even as its absolute sales continue to rise.

The Germans鈥 combined market share will surpass Tesla鈥檚 to reach 11.8 percent in 2020 before increasing further to about 19 percent three years later, according to its projections.

The new Mercedes, due to reach its first customers next year, will be priced close to the fuel-burning GLC to compete in the same bracket as Tesla鈥檚 US$49,000 Model 3, helped by its hotter-selling SUV form.

An affordable Model Y SUV is slated to join Tesla鈥檚 high-end Model X crossover and Model S car, but not before 2020-21.


 

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