Business News News

Start Your Engines: The Second Wave of Luxury Electric Cars

For the past five years,


TSLA -3.99%

has owned the market for luxury electric vehicles. That is about to change.

Jaguar, the iconic brand now owned by India’s

Tata Motors

TTM 0.27%

, 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,


VLKAY 0.32%

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. Tesla has blamed the crash on the driver; a preliminary report from the National Transportation Safety Board didn’t address the cause of the crash but confirmed that the driver’s hands weren’t on the wheel in the final six seconds before the crash.

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 [email protected]

Source : WSJ

Related posts

Fraudster staged £40k Apple scam


Rail fare price hike sparks anger from commuters and unions


Greenock stabbing: Man, 43, arrested after two police officers stabbed in call-out


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.