Accused ‘Tesla Killers’ cleared of all charges

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This article was originally published on evannex.com.

The myth of the “Tesla Killer” is a tempting one for mainstream journalists, who have learned that any article with the word “Tesla” in the headline, especially a negative one, is a sure-fire click generator.


Above: Audi E-tron Quattro concept on display at the Frankfurt Auto Show (Image: South China Morning Post via EPA)

On the face of it, the thesis is sound: any major automaker that decided to get serious about selling (not just producing) EVs could use its advantages in economies of scale and access to capital to bury tiny Tesla. However, those of us who follow the EV market closely have never considered this a serious threat to the California carmaker. The would-be killers may have the weapons and the opportunity, but they lack the motive.

Tesla exists only to sell EVs, whereas legacy brands are producing EVs mainly because of pressure from government regulators (and increasingly, in response to competition from Tesla), and have shown a notable lack of interest in selling them in volume. The reasons for this are becoming apparent, as one carmaker after another concedes that it expects electrification to take a huge bite out of the record profits the industry has been enjoying for the past several years. The companies understand that the transition is inevitable, but it’s one that they’re in no hurry to make, and this fact is starting to sink in with auto analysts and the media.

As Simon Alvarez, writing in Teslarati, puts it, “With legacy automakers revealing their highly-anticipated Tesla competitors, and with each company running into challenges of their own, analysts are starting to retire the myth of the Tesla Killer.” Alvarez cites the examples of Toni Sacconaghi of Bernstein, a known Tesla skeptic, who recently stated that Model 3 faces “no credible competition” from legacy auto until at least 2020; and Berenberg Analyst Alexander Haissl, who reiterated a Buy rating on TSLA with a $500 price target, saying that fears of competition are “overblown.” Another convert is Andrew Left of Citron Research, formerly an outspoken TSLA short-seller, who recently said, “there is NO Tesla killer. Competition is nowhere to be found, and no electric vehicle is slated to launch at the Model 3 price point until 2021.”


Above: Between January and October of this year, Bloomberg reports that Tesla's "Model 3 is now more popular than the entry-level luxury offerings of Audi, BMW and Mercedes-Benz combined." (Source: Bloomberg via InsideEVs)

Additional evidence of the Tesla Killers’ innocence was presented in a recent report from Hamburg-based Berenberg Bank (via Forbes). “Tesla Inc will shrug off what was once thought to be the existential competitive electric car threat from the Germans because of its lead in range, design, engineering and cost,” wrote Berenberg analyst Alexander Haissl. “Tesla has already demonstrated its ability to outcompete incumbents and their ICE vehicles despite a higher price, as consumers are willing to pay a premium for a better product.”

Berenberg thinks the German and British EV-makers will face a pricing problem. “Newly launched EVs by traditional [manufacturers] will come to the market at a close to 80% purchase price premium before subsidies compared to their ICE counterparts, without offering meaningful incremental benefits to the consumer. Consumers’ willingness to pay such a premium could turn out to be limited, which puts the competitive position of these EVs at risk,” Haissl said.

The unfavorable market dynamic isn’t the only oil slick in Big Auto’s lane. Other attempts to take on Tesla have undergone a few unforeseen difficulties:

  • Mercedes recently announced that the EQC, intended to be a competitor for Model X, will have a gradual rollout thanks to concerns over the vehicle’s battery and other electric powertrain components.
  • Audi has also had to delay the release of its new e-tron, due to issues with the vehicle’s software and with battery provider LG Chem, which may be getting ready to raise its prices (as reported by German news magazine Bild). Audi also lost face when it revealed that it plans to make the e-tron a special order in the US.
  • Reviews of Jaguar’s I-PACE are coming in, and most agree that it’s a fine vehicle, but that it falls short of Model X in terms of efficiency, range and charging speed.
  • GM has decided to completely shut down production of its acclaimed Chevy Volt as of March 2019.
  • Amid the scandal involving CEO Carlos Ghosn, Nissan has postponed the much-anticipated launch of its long range Leaf.
  • BMW's board member in charge of development has admitted he expects 85% of the company’s cars will still have internal combustion engines in 2030.
  • Porsche’s vaunted Taycan is expected to be a money-loser, and the company expects line-level workers to share the pain. A Porsche exec recently said employees at the Taycan’s planned factory would have to give up regular salary increases for the next few years.

Above: Along with legacy automakers, MKBHD also looks at some of the new, so-called "Tesla Killers" getting a lot of buzz (Youtube: Marques Brownlee)

Tesla has a technical lead of several years on the legacy automakers, an advantage Teslarati’s Alvarez ascribes to “Elon Musk’s long-term play on electric car batteries and the company’s vertical integration.” Tesla’s policy of producing its own battery cells with partner Panasonic spares it the problems currently plaguing Audi and Mercedes. The Apple-like integration of Tesla’s hardware and software creates a unified user experience, and helps to avoid the sort of issues that Jaguar is facing with the I-PACE.

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This article was originally published on evannex.com.

Written by:
Charles Morris
 

Comments

#4
Seems fairly straight forward. Hard to see anyone coming out with something overnight, as it simply takes time to develop and perfect these vehicles to the point of performance AND safety such as Tesla has done.

IMO - the most overlooked aspect of the competitive landscape is Tesla's supercharging network. No other vehicle can use them, unless Tesla decided to license their tech to Porsche or Nissan, etc. As a P3D owner, i would hope that Tesla will not do this and take the Apple approach, preserving their network for only their vehicles. But it deserves a fair amount of analysis to understand the impact this could make on ADOPTION. Remember, Honda and Toyota turned their backs on pure electric and adopted hydrogen as the future, but they have not seemed to make inroads and in fact have had a shortage of hydrogen in the LA area and offered Murai owners to swap out for loaners.

This isn't to say that no one can or will catch up, because they will. Tesla just has a massive head start. Then again, the car as we know it may be extinct in 20-30 years with autonomous vehicles and ride share subscriptions making more and more sense..
 
#5
As a Long Range Model3 owner I’ve been thinking about options from the competition a-lot. I figured I’d post here since non of my ice driving friends understand... lol.

Looking at the all the comments on cars like the Audi E-Tron GT and Porsche Taycan... many people are hung up over the lack of range vs a Tesla.

However the lack of range really shouldn’t be a concern. The majority of driving is going to be m-f for work so as to pay for these EV vehicles. Go to work, plug in at home and charge up, go to work again over and over and over.

What people should look at is how fast it can charge at a fast charger. Need to take into account that a Tesla supercharger will pump out at a rate of 120 kwh to 135kwh. The ultrafast chargers that VW needs to put out due to dieselgate will do 350kwh.

A Tesla Model3 Long range for instance can do 310 miles on a full charge. However a full charge at a Tesla Supercharger in the middle of a road trip can take 45 minutes to an hour for that 310 miles of range. So we get around that by just charging to 80% which gets the Model3 about 248 miles of range which takes 30 minutes to get to that point. That’s about enough time to get a quick bathroom break, stretch the legs, catch up on some emails or texts.

OTOH theoretically with what Audi and Porsche are claiming with their 350kwh ultrafast chargers can get 80% of the 250 ish mile in 12 minutes. That’s about 200 miles of range in 12 minutes. To put that in perspective both my FJ Cruiser and BMW V8 M3 will get about 200 miles before the fuel light pops on and takes about as long to fuel up. In real world use I’d say that is as practical for interstate travel as ice cars.

Now since the E-tron GT and Taycan are still not available yet... would be interesting to do a theoretical multistate inerstate race.
- Tesla Model 3 Long Range and stopping to charge when the nav say to charge
- an ice car with fueling stops to mimic an E-tron GT.... so only go 200 miles then splash fuel and can’t leave the station for 12 minutes
- an equivalent performing ice car just driving and fueling as normal
 
#6
Nice article! Thanks for the effort. The phrase "Tesla Killer" seems to come from the visceral reaction that many people have to electric vehicles. I don't understand why those folks are so threatened by an alternatively powered car that they feeI compelled to refer to them in insulting manners such as "glorified golf carts" along with other angry epithets. Trying to convince them of EVs virtues is as hopeless as attempting to change their politics. Good Luck!
I took possession of my M3D Long Range about 10 days ago and I am delighted with the car and the more engaging experience it offers to my formerly mundane 26 mile commute on I-5 in San Diego County. My previous vehicle was a BMW i3 which while being a worthy automobile, is no match for my Tesla. I considered another BMW electric until a bit of research revealed two critical points; First is that BMW plans to build their iX3 in China. No thanks! Also, BMW is clearly not committed to EVs as evidenced by recent comments by the company CEO.
 
#7
IMO - the most overlooked aspect of the competitive landscape is Tesla's supercharging network.
I agree about this - even though most of my driving is boring commute and local stuff, I do take road trips and I'm happy to not have 2 cars for the purpose, or to rent, etc

We had a low range EV for 2 years, specific for commuting but there was also the legacy ICE car saved for trips. Was great, for that even liked the car, but the 3 is better and the flexibility is the cherry on top.

Will be happy for the day when fast charging is the norm and range discussions are a weird historic quirk concern