Market for Luxury Electric Cars Could Get Very Crowded

By · October 12, 2016

Mercedes EQ concept

As Tesla shifts focus to its long-standing goal of producing an affordable long-range EV, a new set of incumbent carmakers appears to be making a move for the luxury electric car market. It’s uncertain how the new electric players—including Mercedes, Audi and even Maserati—might affect sales of the Tesla Model S and Model X, which are the most popular all-electric vehicles so far this year.

Yet, last month, UBS said that Tesla could already losing ground in the luxury electric-car segment among consumers who earn more than $100,000 a year. In a survey of 9,4000 people in six countries conducted by the Swiss financial company, respondents representing the richest households said they are more likely to buy an electric car from well-known established luxury automakers, such as BMW or Audi. Between 41 and 52 percent of households with six-figure incomes would chose existing brands, while about 20 to 29 percent would go with a Tesla. (UBS also said that Tesla is “unlikely” to make a profit on its upcoming more affordable 200-mile Model 3.)

That’s all good news for German automakers, such as Audi, who plan to push the envelope of driving range in a premium electric car. Audi confirmed earlier this year that it plans to introduce a powerful 300-mile all-electric luxury SUV as soon as 2018. Siegfried Pint, Audi's chief of electric powertrains, told us that 300 miles was nearly a requirement to earn mainstream customers, especially in the luxury segment. “If you want to sell a decent number of cars, you need 'first-car ability,'" he said, coining a phrase for an electric car that can serve a driver in every way that a gas car does today.

Audi e-tron quattro

The Audi e-tron quattro, a new ground-up crossover that’s slightly bigger than the brand’s Q5 utility vehicle, will pack a whopping 95 kilowatt-hour battery pack. It’s expected to sell for around $70,000.

Audi will apparently not be the only automaker introducing a luxury all-electric SUV. At the 2016 Paris Motor Show, which concludes later this week, Mercedes showed an electric SUV concept—the first in a series of Mercedes EVs using a new sub-brand called “Generation EQ.” The concept vehicle is a sporty all-wheel-drive sport utility with a sleek design.

The technical architecture is expected to use two electric motors, with the ability to output as much as 400 horsepower, right in line with the horsepower of the Audi electric SUV. Critically, the driving range on single charge is also expected to exceed 300 miles. Mercedes is planning to introduce four electric vehicles by 2020.

According to a recent report in Car and Driver, Roberto Fedeli, Maserati’s engineering chief received orders from Sergio Marchionne, CEO of Fiat-Chrysler (Maserati’s parent company) to deliver an electric vehicle as soon as 2019. “We are working to be ready with something that we can show during the next couple of years,” said Fedeli, speaking from the Paris Motor Show.

Fedeli said that an EV from Maserati would need to go in a different direction than Tesla or other luxury electric cars expected in the next few years. In fact, Fedeli took a jab at Tesla, saying, “The execution and quality of Tesla products are the same as German automakers in the 1970s. Their solutions are not the best.” He mentioned the heaviness of batteries and the lack of an engine note as two problems to consider.

By the time Maserati introduces an electric sedan, the market of luxury long-range EVs might get quite crowded. Based on product announcement, new luxury EVs are not only expected from Audi, BMW and Mercedes—but also Jaguar, Infinity, Lexus and Volvo.

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