No company has made a bigger bet on the future of electric
. Outside of a very small energy storage business, the company
gets almost all of its revenue from EVs, and CEO Elon Musk's
vision of producing 500,000 EVs per year is a testament to his
confidence in the future of battery-powered vehicles.
But the auto business has a history of failed start-ups,
especially those without the scale to produce new innovations
before competitors catch up. If Tesla Motors is going to hold
on to its throne atop the EV world, these are the companies it
needs to watch closely.
Image source: BMW.
If Tesla Motors is going to lose its crown as the King of EVs,
it won't be to a company trying to sell a short-range EV to the
masses. Today, batteries are simply too expensive to build a
long-range vehicle to challenge Tesla Motors that will still be
affordable. So its biggest challenge will come from someone who
can beat it at making high-end electric vehicles and then
pushing them downmarket. In that space only one name comes to
Of the companies putting significant effort into EVs, BMW is
the only one with the reputation for performance to match, or
beat, Tesla Motors. It also has the engineering knowhow to
mass-produce a high-performance EV, and is incorporating
important advancements like carbon fiber to reduce weight in
electric vehicles, something needed to offset the weight of
What Tesla Motors should worry about is that BMW has put
more effort into EVs than almost anyone, with smashing success
so far. The BMW i3 and i8 were sold out in the U.S. the moment
they arrived, and the all-electric i3 was built with a
carbon-fiber frame and sold for a very reasonable $42,200. I
think BMW could scale an EV faster than Tesla Motors engineers
would like to admit, and it would likely be a success given the
company's current performance in the space.
BMW may have been tiptoeing into the EV market initially,
but after proving it can build a successful product and that
its brand and engineering expertise translate to the EV space
it looks like a big potential threat to Tesla Motors.
has become one of the world's two biggest automakers thanks to
a willingness to spend aggressively to capture new markets.
And now, it's turning its sights on the market staked out by
Later this month, it will unveil a concept version of a
new Audi SUV
. Like the Teslas, this new Audi has been designed from the
ground up as an electric car.
Audi is claiming a range of over 500 kilometers (310 miles)
for what it calls the "e-tron quattro concept". Reports suggest
that the range claim is for real: Volkswagen seems to have made
that will allow it to match or beat the range of current
Audi released this sketch of its "e-tron quattro concept".
The concept, a preview of an upcoming battery-electric SUV,
will be unveiled in Frankfurt later this month. Image source:
For now, this Audi is a "concept," a show car. But Audi says
the concept will "provide an outlook" -- a preview -- of a
vehicle that Audi intends to mass-produce, it says, "by
Right now, all we have are sketches. But we don't need any
more than that to know that this new Audi SUV is aimed squarely
at Tesla's Model X.
This is just the beginning of a well-funded push into
electric cars by the Volkswagen Group. A slew of new cars using
the Group's new battery-electric technology is expected to
follow this Audi, including a Porsche sedan that should give
the Model S (or its successor) some very stiff competition.
Porsche and Audi are both known for relentless attention to
detail. If any established automakers can match or beat Tesla's
high-tech cool, it seems likely that they can. And with VW's
scale and bankroll behind the effort, they'll have a good
chance of succeeding.
Honda Motors started the whole "electric vehicles for the
mass market" trend. Tesla popularized it with the Model S. Now,
it's time for
to bat clean-up and take this market over.
How will they do that, you ask? (More likely, you're asking:
Didn't they already
try that with the LEAF
As a matter of fact, they did. And you're right: It didn't
work. Despite selling a car that costs as much as three times
LEAF's price, Tesla outsold Nissan in electric vehicles in six
of the last eight months. (They also outsold
' Volt in
of the last eight months.) But here's the thing: Nissan has the
secret to beating Tesla already all worked out. They just need
to supersize it, and advertise it better.
You see, Tesla's big selling point on its car -- aside from
rave reviews from
-- is the fact that it boasts better all-electric range than
any other EV out there. A fully charged Model S will move you
as much as 270 miles down the highway, whereas a LEAF peters
out at just 84 miles today.
Granted, Nissan is hard at work trying to up LEAF's range to
250 miles. But I think that's neither here nor there. The real
key to unlocking LEAF sales is for Nissan is to do away with
"range anxiety" entirely.
Nissan already tried this once, when it floated LEAF buyers
an offer of
10 days' free rental
of a gasoline-powered car -- to eliminate range anxiety on long
family vacations. That offer has been rolled back to just seven
days since -- but that was a big mistake. If Nissan were to
offer LEAF buyers an unlimited number of days of free rental on
a gas-powered minivan or SUV, for example -- emphasizing
family-road-trip friendly vehicles -- I expect that would spur
After all, 95% of all car trips made by U.S. drivers are 50
miles long or less. Fifty miles is well within the LEAF's range
already. Take away range anxiety on the remaining 5% of car
trips that are a bit longer -- and importantly, make those
trips free to the LEAF buyer -- and there's really little
reason left to lay out $70,000 to $105,000 on a new Tesla Model
S, when a $30,000 LEAF can do the job just fine.
Will Tesla Motors hold on to its throne?
We're still in the early innings of the EV revolution, and
well-capitalized competitors are just now starting to put real
effort into the market. Can Elon Musk and Co. hold on to their
current crown, or will the manufacturing expertise and scale of
competitors overtake it? BMW, VW Group, and Nissan Motors may
be the three companies it needs to watch closest.
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This Automaker May Eventually Dethrone Tesla as
the King of Electric Vehicles
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