How Are Germany’s Tesla Killers Playing Out?

SEP 24 2018 BY EVANNEX 34

DID GERMANY’S ‘TESLA KILLERS’ LIVE UP TO THEIR HYPE?

Recently, there’s been a spate of splashy parties to celebrate upcoming electric cars from Germany’s automakers. Before these cars were unveiled, many anticipated the likes of Mercedes and Audi would have perfected a “Tesla Killer” — depriving Elon Musk of even more sleep. So what’s the consensus after these glitzy gala events wrapped up?

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Tesla Model X, Audi e-tron, Mercedes EQC (Images: InsideEVsTurbo)

Financial Times reports that “The big question is whether this electric onslaught threatens Tesla, or helps it by tipping the car buying public towards battery vehicles that will expand the company’s potential market.” Comments from auto analysts suggest this might be the case.

“Rather than crushing new entrants, we suspect incumbent carmakers will help validate and expand the existing market for electric vehicles,” wrote Bernstein analysts, likening the electric car wave to the boom in digital cameras, where an influx of products from established groups aided new players in growing their business.

Looking at Audi’s latest effort, “The e-tron underscores that catching up with Tesla is more difficult than expected by many,” wrote analyst Patrick Hummel at UBS, who noted that the car has slower acceleration and a shorter range than the Tesla Model X SUV, its direct competitor. Though “well made,” the car “fails to set new benchmarks in the premium EV segment, even though we consider it better than the Mercedes EQC.”

Above: Explaining the “Tesla Killer” fallacy (Youtube: Teslanomics by Ben Sullins)

“Tesla has a significant technology advantage over others,” Mr. Hummel says. UBS executed a Model 3 teardown and notes that Tesla has “next-generation, military-grade tech that’s years ahead of peers,” explaining that the battery pack “appears to be ahead of all current production electric vehicles,” while the company has made “technological strides” in developing the inverter in the electric motor.

Furthermore, UBS notes that “Many of these features would be hard for established players to adopt, largely because they are developed in-house by Tesla, while others lean on their suppliers for technology.”

FT reports Tesla solidified a “head start over the industry, and the fact that it started from scratch rather than adapting existing models to run on batteries has also given it a technology lead.” After all, “Tesla builds its cars on a platform designed for electric cars only, while many other manufacturers adapt existing combustion engine architecture for their battery cars.”

Above: Tesla’s cars are built from the ground up as electric vehicles (Image: Tesla)

Looking at Germany’s upcoming e-cars, Financial Times concludes, “Early indications are that the new wave of electric vehicles, each one feted as a ‘Tesla killer,’ falls short.”

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Source: Financial Times / Teslanomics by Ben Sullins

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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34 Comments on "How Are Germany’s Tesla Killers Playing Out?"

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“next-generation, military-grade tech that’s years ahead of peers,”

Mouarrfff, clowns (I can only guess he is talking about Nvidia Autochauffeur, still stupid)

Germans design their cars to be profitable and reuse existing lines, time is on their side, with the Chineses, they will own the EV market

That’s what the German’s said about the integrated circuit industry moving from analog to digital. We’re still waiting for a German tech company to emerge in that field. But perhaps, when they do, they will be profitable!

I doubt it.

The dealers aren’t in any big hurry to sell electric cars. Their profits come mainly from selling used cars and repairing cars. Selling electric vehicles reduces their profit from repairing cars if they sell too many.

Secondly, there just isn’t that many high end European car dealerships.

Thirdly, GM, Ford, Honda, Toyota, or Hyundai/Kia, either aren’t doing much or not directly competing with Tesla’s model line-up.

The great unknown, however, is how the Trump tariff tax will affect the cost of all new vehicles with Chinese made parts.

Quick! Put a Finger in that Hole! It’s Leaking badly!

Having bought New Vehicles, from GM, Nissan, Dodge, Kia, and Nearly New from Mazda (a “Consignment” 1983 RX7 GSL-SE, With Aftermarket Arkay Turbo System), for about the last 42 years, I can suggest, with only a brief Drive of a Friends Model S, and a few miles in an EV Conversion That I bought in 2006, I would say, first off: “The More, The Merrier!”

Next: “Best of luck trying to out Sell any Tesla Class Vehicle! Best Whishes! (Model 3 just out sold BMW ICE vehicles. For August! September could be even more interesting, in the sales activity ranks!)

Tesla did not outsell the BMW ICE vehicles, BMW are at around 200k per month. Cherry picking a single market….

Model 3 didn’t even outsell all BMW in the US. S+X+3 almost outsold BMW in the US, and probably will in September.

pst…china out sells the usa and the rest of the world combined.

@Dam said: “…Germans design their cars to be profitable and reuse existing lines, time is on their side, with the Chineses, they will own the EV market.”
———-

It’s good to learn the German traditional car makers have the luxury of time on their side… because it may take a very long time before they are able to win back the customer base they have lost (and continue to lose) to Tesla.

The recent EV related JV agreements Mercedes has entered with China Inc are in my opinion a massive sellout of both the Mercedes brand and Mercedes IP… I would not be surprised if these agreements end up being investigated by Germam regulators as to why certain Mercedes execs promoted and allowed these agreements to be entered.

continued…

I hope all this gets worked out for the German traditional car makers because they have the potential of bringing to market great EVs under their own brand name.

Huh, an I thought they designed their cars, at least the diesel ones, to cheat existing pollution standards, and not meet future ones.
Thanks for the “Dam” insight.

German auto makers have had since 2008 to show they can do as good as the original Tesla Roadster. They have had since 2012 to show they can do as good as the Model S.

So far… not so much. The BMW i3 is what I’d call a third-tier entrant. Audi/VW’s e-Tron deserves second-tier status, but they’re not making that car in quantity.

Only Tesla makes first-tier BEVs, or (outside China) makes any effort to produce them in volume.

Now EVANNEX has gone paranoid fantasising about Tesla killers.

I’d say it looks like Eject is “paranoid” about losing massive amounts on his TSLA short investment… but that’s a very rational fear, not paranoid at all!

I think the one thing Tesla enthusiast get wrong is there will be a “Tesla Killer”. The killer will be the overall market penetration Tesla will be able to make as more and more players get into the market. Currently, Tesla pretty much has the market to themselves in everything greater than $45k. Now you add in Jaguar, Mercedes, BMW, Audi, Porsche, etc… And if you’ve noticed they’ve mainly introduced CUV/SUV which is the hot thing in the market. Next, you add Kia/Hyundai, GM, Nissan, VW with their lower tiered release models. That leaves Tesla with a handful of models competing with a whole range of vehicles up and down the price spectrum.

That’s the killer to Tesla – not a single model.

The vast majority of the sales of these new vehicles will be from people that are loyal to their respective brands or people that would not buy a Tesla specifically. There will be very few people moving from Tesla to them or even cross shopping from Tesla to the other brands.

I agree the Jag/Audi/Mercedes/BMW BEVs are defensive efforts to prevent defections to Tesla. It’s a bit of a double-edged sword, though. The typical brand-loyal driver is pre-disposed to accept an anti-EV cliché as a rationalization. Going into their local dealer’s showroom and seeing a BEV chips away at that rationalization. If they open their mind enough to check it their brand’s BEV, the next obvious step is to check out the competition, aka Tesla. Legacy dealers who put up an inferior BEV run the risk of having even more defections than if they ignored BEV entirely.

It’s a bit of a tightrope.

So much for the tightrope – US Audi dealers won’t stock the e-tron. Special order only!

Right, it’s a phenomena, a lifestyle, a life statement, that gets positively re-enforced by others who have joined the ev revolution. It can’t be stopped, ignored, nor reasoned with. It doesn’t feel pity, remorse or fear. It has no regard for your past accomplishments, as it silently rolls over the ice until they are all dead.
https://www.youtube.com/watch?v=zu0rP2VWLWw

the car market is not a zero sum game. If Tesla turns a profit or is very close to a profit in Q3, Tesla’s future looks secure. Tesla still has around five years before they have any real competition.

Car market is basically zero sum In US and Europe.

That’s true, but the EV segment of the market is still wide-open. It’s only a zero-sum game in that EVs are eating more and more into the gasmobile market. The idea that models of EVs are primarily competing with each other, is simply wrong. And that reality will continue until EVs are a substantial fraction of the overall automotive market.

CUVs are hot in the ICE market. Time will tell if this will be worth the 20% to 25% hit on range in the EV market.

“That leaves Tesla with a handful of models competing with a whole range of vehicles up and down the price spectrum.”

This is just so utterly, completely wrong.

Firstly, Tesla’s models are not primarily competing with other models of EVs for sales. They are primarily competing with gasmobiles for sales! Just look at the cars which are being traded in for the Model 3; most are gasmobiles.

Selling compelling BEVs isn’t a zero-sum game. Have the I-Pace and the e-Tron reduced Tesla’s sales? Of course not! What’s a zero-sum game is selling plug-in EVs vs. gasmobiles.

Secondly, no auto maker selling outside China is even attempting to make BEVs in large numbers, other than Tesla. Now, it looks like VW is getting serious about plans to do that in the near future, since they have announced plans to invest $48 billion (!!) in securing battery supply. But that is the only company which appears serious about offering Tesla any substantial competition in the near future.

Ben Sullins mentioned some very good arguments. Just play that video.

All the new EV models that enter the market, they just eat marketshare from ICE. Just like Tesla EV models are eating marketshare from ICE.

Any decent car made beyond compliance numbers is a welcome weapon in the EV revolution.

I would be very cautious betting the world will behave like US (rather California) for Tesla. Many people will prefer to buy a good electric car from Audi rather than from Tesla. Look at Tesla sales in Germany or France. They are ridiculously low. Best selling Tesla model in Germany is Tesla model S (47 units in August). Model X is not even in the top 20 electric cars.
Model X design is not very nice and interior is Cleary far away from what Audi can provide in build quality.
Tesla proved electric cars can be sexy, and that’s a big benefit.
To be really successful worldwide, they will need at least one extra model (more compact one, Golf size ) and a city car would be perfect for Europe.

“Many people will prefer to buy a good electric car from Audi rather than from Tesla.”

Clearly Audi does not agree with you, since Audi dealers won’t be stocking the e-Tron. It will only be available as a special order. So long as this is the type of “competition” legacy auto makers will offer, then Tesla can safely ignore them. Not just one of them, but all of them.

Why are they Tesla killers and not just competition? Every new Ford Mustang isn’t a Camero killer… Every new Silverado isn’t a F150 killer…

You know Steven and Co., I really love love this Website. It’s my go-to standard for one of my main sources of news for my shows. However, I really hate hate these “Tesla killer” headlines as they are really just for clickbait. I’m disappointed in EVAnnex and especially Ben for actually using this term. The info you point out in this article is common sense. Of course more EVs being produced helps ALL the EV manufacturers, not just Tesla. There is room in this 2% worldwide-only-achieved space for EVs to grow the market and these EVs being produced by more manufacturers. To compare the e-Tron to the Model x is not fair since the price point between the two is not even close. The Model X is wayyyyy more expensive! Consider this, I just came back from driving an iPace and spending some time in it. Yes, Tesla has a technological edge in Battery Design and Operation (longevity), as well as fore-fronting the now-everybody-uses-it “skateboard” chassis design where the battery creates a low centre of gravity, spacial rigidity for increased safety and batter handling. And yes, Tesla’s AutoPilot is ahead of most (however, IMO not that far ahead). Other that… Read more »

Jag’s been building cars for 90+yrs. Tesla has been building cars maybe 10yrs. Jag sells about 180,000 vehicles world wide. Tesla looks to be selling 2 models in the 50,000 mark world wide. If you take the time as a manufacturer as an indication (as you clearly do) then Tesla looks to be on the rising star very clearly compared to Jag. For all their 90+yrs capability why are they still only about 180,000 vehicles of sales? It can’t just the luxury price tag, Tesla also commands a high price tag, yet sells a significant amount of vehicles with just 2 models.
Of course, Model 3 is a whole new ball game which we will have to see how that plays out.

We all remember World War 2 correct? What happened to the Germans back then? …That’s right.

I question that analogy is even remotely relevant.

I remember the WW II era Volkswagen Beetle, which was a best-seller in the U.S. for decades, far longer than just about any other car.

I find it very notable that when comparing forthcoming (what I’d call) second-tier BEVs to Tesla’s first-tier BEVs, most analysts talk only about the quality, and ignore the quantity.

Meanwhile, Audi says it will ship the e-Tron to dealers only in response to a customer’s order. Audi dealers won’t even stock the car.

So far, I haven’t even seen any other auto maker challenge Tesla for quality; cars such as the I-Pace and the e-Tron are in my opinion second-tier, and cars such as the Bolt EV and the BMW i3 are third-tier.

When comparing quantity of production, the other EV makers are doing even worse!

Perhaps on some future day, some other auto maker will actually challenge Tesla for the lead in the EV revolution. That day isn’t today, nor next year, nor the year after, either.

Go Tesla! Keep going Tesla!

I think Tesla competitors lost the plot. You can clean a Model 3 dash with a baby wipe. Etron and IPace require a ‘detailing’ to say the least