[font face=Serif]Kevin Bullis
July 25, 2013

[font size=5]Tesla Versus the Luxury Automakers[/font]

[font size=4] Does the introduction of luxury EVs from BMW, Cadillac, and Mercedes spell doom for Tesla?[/font]

[font size=3]Tesla Motors, the 10-year-old maker of high end electric vehicles, hasn’t had much direct competition. Tesla sells to wealthy people who want a high performance car. Other automakers seem to be going after a different target—people who can afford an luxury vehicle, but who are willing to buy an economy car with an electric motor instead. Ford, for example, lets you buy a Focus for about $20,000, or basically the same Focus for $35,000, battery included. (The strategy seems well-calibrated to allow automakers to meet California mandates without seriously cannibalizing sales of more profitable gasoline cars.)

Now BMW is about to unveil its i3 electric vehicle. Mercedes is coming out with a B-Class EV and Cadillac is rolling out the plug-in hybrid ELR (a luxury version of the Chevy Volt). And this has some industry watchers wondering if it’s all over for Tesla.

It isn’t all over for Tesla. These luxury automakers still aren’t directly competing with the Model S—their models don’t come anywhere close to having the performance or the range of the Model S.

The i3 is a small urban vehicle with a range of about 100 miles that takes around seven seconds to hit 60 miles per hour. For extra, you can have BMW install a motorcycle engine to boost the range to 180 miles (see “BMW's Solution to Limited Electric-Vehicle Range: a Gas-Powered Loaner”).

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