Tesla’s Pure BEV Approach Favored Over German Luxury Plug-In Hybrids

SEP 2 2015 BY MARK KANE 58

Mercedes-Benz S550 Plug-in Hybrid

Mercedes-Benz S550 Plug-in Hybrid

Tesla Motors reshuffles the car market upside down.

Least happy from the Tesla Model S success should be other luxury/premium brands that are losing market share.

Tesla already sold over 80,000 Model S and because Tesla is new on the market, some other manufacturers sold less cars due to the launch of the Model S.

A recent Forbes article states that German brands like BMW, Audi, Porsche and Mercedes made a mistake by entering the plug-in hybrid part of the market, because consumers are more willing to buy all-electric, especially in the future.

Professor Ferdinand Dudenhoeffer, director of the Center for Automotive Research (CAR) at the University of Duisburg-Essen in Germany, said that the big three Germans wasted money on the blind-alley of plug-in hybrids.

“…they are losing sales in the most profitable end of the luxury market to Tesla. Rich people who have formerly bought the flag-ship Mercedes S-Class, BMW 7 Series and Audi A8 are turning to the Tesla Model S.”

The drawbacks of plug-in hybrids are weight, complexity and extra cost with gain of all-electric range of just around 30 miles (not necessarily in the whole range of speed and acceleration). Dudenhoeffer said that such a solution isn’t very environmentally friendly (most of the mileage is outside of electric mode) and that the German automakers just invested in the wrong technology.

Few more quotes from Dudenhoeffer:

“I think plug-in hybrids are the wrong direction and will not be successful. The costs are too high. The weight of the car is too high,”

“I think environmentalists and governments will come to the conclusion that plug-in hybrids are not real progress. I’m sure that in the next two or three years, the buying public will come to the view that these cars are not environmentally friendly because they will start to burn oil after just a small bit of electric power,”

“In a lot of markets we are seeing Tesla doing better than the BMW 7-series, Mercedes S-class, Audi A8 and Porsche Panamera. Tesla can boast real innovation and customers with big money are trying it. I’m not sure if Tesla will be successful in the long term but when they broaden the line we will see if it can bring revolution to the car industry.”

Well, there’s some truth to this. In Germany, Tesla sold so far this year more Model S than all plug-in hybrids from Porsche and Mercedes combined, despite Tesla being a new brand and having only one model and no production facilities within Germany.

Audi announced a new all-electric SUV with up to 500 km of range, but it’s expected in 2018, which is still far from today.

Do you think Tesla’s pure electric choice is wiser than the German automakers’ plug-in hybrid route?

Source: Forbes

Categories: Audi, BMW, Mercedes, Porsche, Tesla

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58 Comments on "Tesla’s Pure BEV Approach Favored Over German Luxury Plug-In Hybrids"

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“the buying public will come to the view that these cars are not environmentally friendly because they will start to burn oil after just a small bit of electric power”
———

90% of the trips in the Gen2 Volt will be gas free. I have to imagine it’s even higher in the BMW i3 REx.

so true kdwag

and what about this statement:

“The drawbacks of plug-in hybrids are weight, complexity and extra cost”

Since you can buy 3 Chevy Volts for the price of 1 Model S I would say that statement is false also.

The statement is correct. Compare a Volt with a Malibu (or whatever the Volt is derived from) to see the truth in the statement. Carrying around 2 complete drive systems as the Volt does increases weight, complexity, and cost, and in the Volt’s case, reduces available interior space and raises the center of gravity as a result of placing the battery pack in the center of the car rather than under the floor. I’m surprised Chevrolet stuck with this poor design, but maybe it’s easier and less expensive to implement than under the floor.

No evidence that the Chevy Volt has a higher center of mass than equivalent ICE cars nor is there any evidence that it’s a poor design.

Forget the complexity issue.
As people know from the success of the Prius, hybrid power split transmissions are reliable.
ICEs are well known, and becoming more reliable. Although they wear and need maintenance, plug-in hybrids, especially a near-EREV like the Volt, give their ICEs a much easier life than in an ICEV.

The main problem for PHEV is _packaging_. As long as the car’s a parallel hybrid, it has more stuff to put in the car and the are limitations of where the parts can be placed. So we have the Volt with a cramped cabin, and the other PHEVs with ugly lumps in their cargo areas.

A PHEV can never be as cheap as an ICEV, but the marginal cost can certainly come down. A continued fall in costs of battery and power electronics, and increases in sales would put the squeeze on plugless hybrids. Get PHEV batteries down to $200/kWh and you could see 8.8kWh vehicles costing maybe $2k to $2.5k over a plugless hybrid. If it comes in part from increased density, more people would opt for the plugless hybrid.

In the Volt, the center of gravity gets lowered, and the car is well balanced.
Other “hybrid conversion” have boxy batteries.

Volt 2 has made the battery thinner and lower.

And I don’t think there is much weight difference between adding an ICE + gas tank vs 150 miles worth of batteries.

took the words right out of my mouth.

Most European PHEV’s have a very short AER, so you’ve got the additional complexity and cost without much AER.

This seems like such a stark truth, to those of us who drive PHEVs.

When a major OEM says “customers tell us they want more range”, and the car gets 37 AER, German OEMs should take note.

Also, while several of the <10kwh PHEVs deliver decent all-around EV performance, most don't even if 15 miles works for you. You get all of the maintenance prospects of ICE warm-up cycles, if you reach for hardly any throttle.

With more battery comes more range…..and performance.

Which means the existenz of the ICE is a total waste.

That statement is in reference to german hybrids, which have less aer in their high end cars than the first volt has.

Volt is super plug-in compared to European half ass nonsense. What percent of your annual driving distance will be electric if you have 18 miles of AER?

The article says luxury car. Does the Volt sit five comfortably and accelerate from 0-60 in less than 4sec? I don’t think a German S class or Panamera buyers would ever look at a Volt.

OP said: “Do you think Tesla’s pure electric choice is wiser than the German automakers’ plug-in hybrid route?”

Hybrids (with AER >45miles) and BEVs (with >250miles) are the absolute minimums any car maker serious about capturing EV luxury market share needs to deliver.

For some reason there are those that promote the idea that European markets are somehow different and that in those markets mild luxury EV hybrids will work…that theory is going down in flames.

Clarification: I did not above mean to suggest that the OP is one of those that promot luxury EV mild hybrids OK for European markers.

European markets may or may not be different, but their regulations certainly are.

anything is better than a German car

I guess you’ve never had the pleasure of driving a Lada. Here’s one video. Warning, there’s a lada smoke! 😉

“Do you think Tesla’s pure electric choice is wiser than the German automakers’ plug-in hybrid route?”

Short answer: Yes.

Although those German cars will be more successful in the current decade than in the next decade. As from 2020 the charging-infrastructure will have reached a certain level, and people will massively start to accept the EV as the primary means of transportation.

If you think just about the luxury space, he’s mostly right. Margins, while thinner, can absorb the superior BEV approach, and gain share. The cars he names are his context.

From an infrastructure standpoint, Europe does not have the expanse the U.S. does. Merely answering to its tighter (city) regulations, when you arguably do not need to shoot for as many kwh, is the grand folly of Porsche / BMW / Mercedes.

OMG! Professor Nostradamus has spoken! The big 3 selling tens of millions of cars every year are doomed now. They should pack up and shutter their operations.

Given the background of Dudenhöffer, I think that the big 3 should at least take into account that what he says makes some sense 😉 You are right, that they are selling quite good – right now – but will that be the case in 2-3 years? We don’t really know. And given the fact, that complexity of a BEV is far far far lower than that of a PHEV I think that more people will tend to wait for BEV over buying a PHEV. It is foreseeable with just a little common sense, that range will not be an issue in some years (let’s wildly guess 3 years) as distances in europe are not that huge. Furthermore the electric grid in europe is more than great. The thing is, that more and more normal people are loosing confidence in their preffered big 3 companies, as it gets harder to ignore that what those 3 try to make the people believe (BEV is not good) is something they want us to believe. Just look at what they are offering… They build what they want, not what the people want. They could easily offer faster charging for example. They even had… Read more »

Automakers are using PHEVs as a bridge until battery or fuel cell technology matures and cheapens. Don’t expect them to be the future.

“bridge technology” is a quite popular term in german industry and it often translates to “we just stick to what we did for a long time…” (not only ICE)

Maybe using the word “innovative” should become more popular in germany…

No, really, it takes a Tesla Gigafactory to drive down the price and supply a German auto fleet with batteries at prices and volume that you could move to EV’s.

Germany’s mistake is they didn’t do the battery research, and no one had the guts to build a Giga-Factory.

No guts no glory: Capitalism.

The hybrid model is valid in a world of Low Risk companies being traded on a stock exchange.

That’s why Tesla is winning, the mentality of a startup.

I think at the very high-end of the market, pure EVs are the way to go (Model S). But at the lower end of the market, a plug-in hybrid is the way to go (Volt and Mitz Outlander PHEV).

But as long as battery prices keep dropping, that PHEV market will shrink over time.

“PHEV market will shrink over time” and this is exactly the point.

You can bet on ICE or you can bet on BEV, but betting on “something in between” is not a good long term strategy 😉

Eventually . . . but for now, a car that STARTS at $70K is a complete non-starter for most people. That is more than twice the price of the average car. The Volt costs just a tiny bit more than the average car and delivers better value, so it works at the low end.

But for the high-end luxury market? I cannot understand why anyone dropping $80K on a luxury car would want to deal with messy fill-ups, stinky toxic exhaust, a lurching transmission, engine vibration, engine noise, oil changes, smog checks, etc. How gauche! How primitive!

“I cannot understand why anyone dropping $80K on a luxury car would want to deal with messy fill-ups, stinky toxic exhaust, a lurching transmission, engine vibration, engine noise, oil changes, smog checks, etc.”

I’d argue that the only $80K cars that have lurching transmissions, engine vibrations and noise are those that are specifically designed to have those properties (i.e. sports cars) 😉 Try driving, for example, an S-Class. At speed it’s far quieter than a Model S (due to superior isolation against road noises).

These things are certainly not what motivates rich people to switch to a Model S. Right now, people buy Tesla either because they are technology geeks, or they want to project a certain image.

As for Dudenhoeffer, he may well be right in the long term. But right now, pure EVs are simply not an alternative for the large majority that doesn’t want to spend close to a hundred grand on a car. PHEVs are the next best thing from an environmental perspective. And it’s far from certain if and when battery prices will fall enough to change the equation.

This Dudenhoeffer dude is being disingenuous.
Tesla is, at this point, a small, niche, producer (although of course they’re making all the necessary steps to change that: Gigafactory, serious charging network).

No existing carmaker can emulate them at this point without betting the company on BEVs.
EV fans hope most of them will reach this point, but it will take time. For the other carmakers, Making PHEVs is the only way, until global battery production catches up, to make any kind of plug-in that has useful range and could sell in non-negligible numbers.

He’s comparing the _top_ end now and thinking forwards.
As electrification costs continue to fall, long-distance BEVs will continue their march downmarket, through the mid and low premium markets. If they are slow to react they could see an exponential loss of market. Parochialism could see continued preference in their home markets, but the German makes could very easily lose a big chunk of their markets in the USA, UK and China and that would really hurt.

Currently the Germans premium makes are building EU compliance vehicles. They don’t necessarily have to go long-distance BEV, but the ~8kWh cars aren’t cutting it. I think that they’d do a lot better following GM’s lead and going for the ~16kWh low-performance EREV/performance PHEV approach.

I think that Tesla is just making a better car. If Tesla made a phev Model S with 50 AER instead of a BEV and everything else about the car was the same I think they’d still be killing it. It’s a fricken slick car that happens to be electric.

You should also bring in mind how the production of CO2 is measured in Europe. The EU is forcing the car makers to stay below a certain number of grams of CO2 per km. And because of the rules how they are measured, adding an electric motor and a battery with just a tiny range lowers the CO2 considerably. But not in real life. Why not? This can be seen in Holland, where companies can profit from huge subsidies on PHEVs (in the form of lower cost of use then ICE cars; not because of low consumption but because of lower taxes). The companies lease these PHEVs for their employers. These employers too have a benefit when driving PHEVs, because they pay less tax on private miles. So both companies and their employers want PHEVs, but not for environmental reasons, but for tax reasons. And they pocket the benefits even when they don’t plug in their car. Which is what actually happens among many PHEV-drivers. So car companies add a plug, so they can lower their CO2 production, but the buyers don’t plug in, since they get their benefits also without. Seen from a broader perspective you can say that… Read more »

But it is silly for them to focus on that one statistic. Why not also look at the fuel cost? Gasoline in Europe is damn expensive.

The old auto companies are just having a hard time letting go of ICE.

It’s ridiculous to even consider to compare the tiny BEV sales of Tesla to the massive number of electrified cars that the traditional car manufacturers will need to sell to be able to satisfy regulations.

Will they stop/hinder/slow down Tesla with them? No.

Is it the smartest solution considering the companies futures? Hell yes.

Anyone thinking that the PHEVs are there to compete in the 0,5%-2% area of the market for BEVs are (mostly) deluded (including Forbes and Duedenhoffer).
They are there as a quick replacement for the pure ICEs in the general market for your everyday car buyer.

The Model S has both enough electric range (150+ miles, 250+ km) to meet all driving needs; plus comes with sufficient infrastructure (supercharger network). There are really 4 market categories related to EV power trains: 1. Pure-BEV: with 150+ mile, (250 km) range (Tesla Model S, Roadster) 2. Pure-BEV: with 60+ to 150 mile (100 km to 250 km)! range (B-Class, LEAF, Soul EV, i3 BEV, Focus EV, Zoé, 500e, Spark EV, etc) 3. Extended Range PEV: with 30+ miles (50+ km) of all-electric range, augmented with 60+ miles (100+ km) fueled range extender (Volt, i3 REx, Outlander) 4. Hybrid-PEV: under 30 miles (50 km) of all-electric range. Mostly targeted to limited city all-electric driving. Highway driving will mostly be accomplished using traditional fueled ICE. Beyond the power train focus, the practicality of body style, level of features and trim define competitive buying categories. The higher luxury markets are less sensitive to price differences between power trains. Lower price category markets are more sensitive to differences in power train costs. A combination driving experience, cost of operation in addition to price effect vehicle purchase choice. As prices of electric power trains drop, they will become increasing common. Particularly due to… Read more »
There is indeed a market for luxury long range BEV, for sure it is tiny and nobody proved yet it is profitable but nevertheless it is worth noticing as one needs to keep its options open. This is why VW (through Audi) and BMW do both prepare such cars, taking some time as they rather have the “pioneer” Tesla taking all the arrows before they come. This i OK as Tesla is for sure taking its own sweet time too. Now if some of you read site “EV sales” you will notice excellent sales figures of PHEV Mitsu Outlander, so there is ample room for both options and German car makers are right to keep all doors open. Never forget who the shareholders of those groups are (I mean they expect profits, changing the planet is not their priority). Now my own opinion is that the Ford T of BEV’s will neither come from the Germans, nor from Tesla or GM. IMHO it will come from BYD. They sale more BEV’s in one single country that the others do worldwide and they will sooner or later expand to other territories. Charging infrastructure will never be a restriction for any car… Read more »
Well BYD is definitely worth thinking about. It’s China! They could build a Petafactory in less than a year and crank out millions of cars really fast. They are known to build huge things ultra fast. BUT: I don’t think they will expand to other markets that fast. There is enough regulatory to hinder them! (And if that doesn’t suffice, say: they somehow manage to build a car that meets security regulation in lets say europe, there will be measures to make those cars more expensive with prohibitively high taxes (this already happened for solar modules made in china…)) Also, they would have to come to the market from the lower cost side, as people that have to watch their budget tightly are more likely to say: It’s not my favourite brand name, but it’s cheap. You can bet, that the reports on those chinese cars will be mostly negative. Can you imagine any european automotive magazine write something positive about a chinese car? They even report badly over Tesla quite a lot… 😉 So the reception in the public will be: “Oh my god, I will never buy a chinese car!” (That happened long time ago with Toyota… Basically… Read more »

There’s nothing wrong about PHEV technology. With the current state of infrastructure, I prefer it to a pure BEV. The real problem is all of the PHEVs with 12 to 20 miles of all electric range. Most people ask “what’s the point” and with good reason. I like my Volt because I do not buy gas at ALL on a regular basis, rather only on those rare long trips.

I agree that current German PHEV’s have too small an EV range. However I think that their strategy is not entirely stupid. I mean if they install in same battery volume the next generation li-ion cells, EV range will increase by some 30-50% which makes an acceptable EV range for most European users. I understood LG Chem improved li-ion cells are available like, tomorrow.

On a slightly different subject, here below is a link to an article which compares the environement footprint of a natural gaz powered VW Golf, an eGolf and a diesel Golf. The Nat. Gaz Golf came first then the eGolf etc..I did not go deep into it but as this comparison was made in Germany I imagine way electricity is produced is what matters. Ideally electricity should be either 100% renewable or a mix of renewable/nuclear (on a CO2 point of view I mean).

http://www.moteurnature.com/actu/uneactu.php?news_id=28022

they just cite “ADAC e.V.” that says all…

(they lost ALL credibility some years ago… goggle adad skandal or adac manipuliert)

If this is study is correct, what chance does Cadillac have since they are following the German model.

The wrong decision to maintain the status quo and the inability to reinvent themselves will be very costly to the high cost sedan makers..

As you can see from the styling for the new CT6, Cadillac is looking at China. And if you want to sell in China you need to meet strict emissions regulations and understand that the grid makes it difficult for BEVs. (there is a reason Tesla is failing in China).

I do hope, however, that Cadillac or even Buick will come out with a all electric sedan. With its mixed materials construction, GM could make a great handling burner.

Sorry to pick on that one but as far as I understand there was no “study”.

I just mention that, so that others don’t come up in other threads saying: There is a study that says…! and then get blamed for saying so 😉

A 2015 Mercedes S class hybrid weighs 4,729 lbs. Tesla P85d weighs 4,830 lbs. So he is wrong from weight stand point. The main driver for Tesla Model S sales is subsidies. Technology has to improve to make it viable on its own.

People buy a Tesla Model S because it’s an awesome!! car that removes the car owner from indentured servitude to oil. I would buy a Tesla over a Mercedes S Class (hybrid or not). It’s not even a competition IMO.

People buy Teslas for the 0-60 times, the high tech of being a battery powered vehicle, and the fact they are less practical and hence much better examples of conspicuous consumption than the large sedans for the traditional luxury brands.

Some people certainly do. But not all. There are a lot of 60, 70, and non D models out there without the stellar 0 to 60 times.

“Do you think Tesla’s pure electric choice is wiser than the German automakers’ plug-in hybrid route?”

Tesla is the only car maker going BEV only. This is because they cannot afford to do a hybrid as well. They would have to buy engines, transmissions, etc from someone else.

All other manufacturers (not just the Germans) CAN do hybrids because they have both technologies.

All established manufacturers have to do hybrids, because they already have invested A LOT into ICE technology…

The reason why Tesla does not go the PHICE-way is, because they decided NOT to invest in ICE but in EV, because they (and some people understanding the subject) think that EV is less complex, in foreseeable future less enviromentally damaging and has yet other benefits… (long term thinking…)

This is much like the early years in the computer industry. Something new and incompatible will lose to the existing base, but, be accepted by a new base or bleeding edge users.

The familiar warm-fuzzy of filling up your tank in a stinky fueling station will win out against the unfamiliar plug in your garage.

Hehe, you got me on the last one…

You are right!

I just stood at a gas station yesterday, counting the seconds that a gas car needs to refill to 100% capacity. It’s only 2 minutes or so… That’s about the same time you need to wait in line to pay your gas at the counter. I really prefer that over having to plug my car every night in my own garage.

Paying gas at a counter? Are you some integrity nut going all cash so that the aliens will have a harder time tracking you? 😛

At this time, the only way Plug in extended range vehicles like the Volt make sense to me are in those areas where not only are there no superchargers, there are no superchargers planned. If you look on the Tesla supercharger map on North America, there’s a big black hole where they don’t plan to build any, and I live right in the middle of it.

I like a lot of things about Tesla model S. But the big price tag and size does not make it a luxury car. It is (unfortunately) not even close with interior quality to ANY of big german vendors. You get better materials and especially quality of production with entry level BMW1 or VW Golf. Sad, but true.

To me interior is way down on the list of why I pay that money for a car. Eevery thing else on the Tesla just blow away any of these so called luxury car from Germany. That said the minimalist interior is just fine for me and I actually prefer it.