Tesla Led The Charge, But More Premium Electric Vehicles Are Arriving

Jun 29, 2019
Originally published on June 30, 2019 9:08 pm

Alex Schefer loves his Teslas — the Model S he and his wife use to tote their kids around, the Roadster that's part of their premium car-sharing club.

But he's been waiting not-so-patiently to have some other options for luxury electric vehicles.

"This car came out in 2012," he says, from behind the wheel of his Model S. "In 2015, Porsche said, 'Hey, we're gonna make this Mission E.' And that's great. I love Porsches, but now it's 2019 and I still can't buy one."

He won't have to wait much longer. That electric Porsche, now renamed the Taycan, is coming out later this year, as is the first long-range electric Mercedes.

And two new luxury electrics are already on the market: the Jaguar I-Pace and the Audi e-tron.

It's no exaggeration to say the luxury electric vehicle was invented by Tesla. And the California-based carmaker has indisputably paved the way for these new rivals selling for $70,000 and up.

The new entrants put fresh competitive pressures on a company that has been struggling to scale up production and make a profit with the tighter margins on a mass-market car. But Tesla CEO Elon Musk says he welcomes the arrivals.

"Our goal all along has been to try to get the rest of the car industry to go electric," he said in March. "This is great."

Established premium automakers aren't just motivated by Tesla's model. They're also driven by government regulations. In the U.S., that means the zero-emission vehicle mandates adopted by California and other states that follow its lead.

Such regulations have long driven investment in electric vehicles. But for a long time, major automakers responded to the mandates half-heartedly. They'd build "compliance cars" — less-than-appealing vehicles, for sale only in states that required it, rarely advertised and made in low numbers.

Automakers said this was because they were losing money on each one. Chelsea Sexton, a longtime electric vehicle advocate, says that became a bit of a self-fulfilling prophecy.

"As long as things aren't available they're never going to sell," she says. "People can't buy what isn't out there."

But the new generation of premium electrics, the ones going toe-to-toe with Tesla, represent a shift. They're available in every state. And they're hardly underwhelming compliance cars.

"One of things that struck me about the Audi e-tron is that it was so normal," says Rebecca Lindland, an independent auto analyst who writes at RebeccaDrives.com. "You're not compromising, you're not sacrificing. You're driving a really good Audi. And, by the way, it's electric."

Ask Jaguar product manager Dave Larsen why the company made the I-Pace and you'll hear about "combined 400 horsepower" and "zero-to-60 time of about 4 1/2 seconds" and "incredible on-road performance."

One word you won't hear: emissions.

And the North America president of Porsche, Klaus Zellmer, recently wrote an op-ed about the rise of electric vehicles. He mentioned sustainability almost as an afterthought, after emphasizing electric cars' "instant power and sporty handling."

Tesla, too, emphasized its vehicles' performance — but it self-consciously appealed to early adopters, people who wanted to buy something conspicuously out of the ordinary.

Meanwhile, more affordable electric vehicles, like the Nissan Leaf and Chevy Bolt, have marketed themselves as eco-friendly electrics.

Analyst Sam Abuelsamid says manufacturers are now eyeing a bigger slice of the car-buying market.

"There's a certain segment of the audience that wants an environmentally friendly vehicle — they want to show off their green credentials," he says. "But the reality is that most consumers just want to have a nice car that drives well, looks good."

"We are not any more in this very early adopter phase," says Thomas Ingenlath, the CEO of Polestar — the luxury electric brand launched by Volvo. Polestar will be releasing its first premium all-electric model next year, initially selling for $63,000.

The electric vehicle market is becoming "much more sophisticated," he says, "establishing an ecosystem of different car brands which simply make this electric market a much more mature and attractive offer for the customer."

But will these new offerings draw in customers who aren't actively seeking a car that comes with a charging cord?

That's one thing analysts will be watching as these new options arrive on the market. And it's not just a question for the Porsches and Audis of the world.

Right now, every major automaker is working on electric vehicles, at every price point, to hit the market over the next few years.

Clarification: 6/29/19

This story has been clarified to say that the first long-range electric Mercedes is coming out this year. An earlier Mercedes, the B-Class, has an electric option with a range of less than 100 miles.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

MICHEL MARTIN, HOST:

Tesla invented the luxury electric car. And for the last decade, if you want us to drop 70 grand or more on an upscale electric vehicle, Tesla has pretty much been the only option. But now that's changing, and as more pricey electric cars arrive on the market, it's a preview of the entire car industry. NPR's Camila Domonoske has this report.

CAMILA DOMONOSKE, BYLINE: The Jaguar I-PACE, an electric crossover, went on sale late last year.

(SOUNDBITE OF ADVERTISEMENT)

UNIDENTIFIED ACTOR #1: A Jaguar still roars, but silently.

DOMONOSKE: Silently because electric motors are quiet. You may have spotted Audi's e-tron in a Super Bowl ad this year. It's for sale right now. Later this year, the first electric Mercedes and Porsche.

(SOUNDBITE OF ADVERTISEMENT)

UNIDENTIFIED ACTOR #2: So electrified.

DOMONOSKE: Tesla showed that you could make a luxury electric car for a profit. That got the attention of other luxury carmakers - also, government regulations from California and other states that promote electric vehicles. Automakers used to respond to these mandates half-heartedly. They'd build what's called a compliance car. Chelsea Sexton, an industry consultant and electric vehicle advocate, explains.

CHELSEA SEXTON: It is expensive. It's low volume. It's hard to get. It's somehow engineered to be a little bit unattractive in some way, very low range, et cetera, et cetera.

DOMONOSKE: Often, they'd only be for sale in the states that have mandates. Automakers would then point to poor sales to say electric vehicles just aren't profitable. Sexton calls that a self-fulfilling prophecy.

SEXTON: As long as things aren't available, they're never going to sell. People can't buy what isn't out there.

DOMONOSKE: But the new premium electric vehicles - the ones going toe-to-toe with Tesla - they're available in every state, and the cars themselves are not the compliance cars of old.

REBECCA LINDLAND: So one of the things that struck me about the Audi e-tron is that it was so normal.

DOMONOSKE: Rebecca Lindland is an independent auto analyst.

LINDLAND: You're not compromising. You're not sacrificing. You're driving a really good Audi, and by the way, it's electric.

DOMONOSKE: More affordable electric cars, which have been on the market for years, are promoted as eco-friendly electrics. But ask Jaguar executives why the company made the I-PACE, and you won't hear the word emissions. Executives say the goal was to make a crossover that drives like a sports car. Analyst Sam Abuelsamid says this is part of a broader strategy.

SAM ABUELSAMID: There's a certain segment of the audience that wants an environmentally friendly vehicle. They want to show off their green credentials. But the reality is that most consumers just want to have a nice car that, you know, that drives well, looks good.

DOMONOSKE: For a long time, cars like Teslas were bought by early adopters like Alex Schefer. As he drives his Tesla Model S around Arlington, Va., he says he's been waiting impatiently for these other options.

ALEX SCHEFER: I mean, this car came out in 2012. In 2015, Porsche said, hey we're going to make this Mission E. And that's great. I love Porsches. But now it's 2019, and I still can't buy one.

DOMONOSKE: He doesn't have much longer to wait, but the bigger question is, what happens with people who haven't been waiting, people who don't think of themselves as electric vehicles fans? Will these new customers spring for an electric if it's sold by a familiar luxury brand? Right now, it's too early to tell. And few people can afford a car that costs 70 grand and up. But how to broaden the appeal of electrics? It's not just a challenge for the Porsches and Audis of the world. Right now, every major automaker is working on electric vehicles to hit the market over the next few years. Camila Domonoske, NPR News. Transcript provided by NPR, Copyright NPR.

Tags: