Tesla ahead of the pack in electric-car market

A Tesla showroom in the Red Hook section of Brooklyn in February. While several carmakers have added new models intended to cut into Tesla's electric dominance, they have barely made a dent, at least in the United States.
A Tesla showroom in the Red Hook section of Brooklyn in February. While several carmakers have added new models intended to cut into Tesla's electric dominance, they have barely made a dent, at least in the United States. PHOTO: NYTIMES

Although it has become the world's most valuable carmaker, Tesla still has to figure out how to become consistently profitable, reduce quality problems in its luxury cars and turn alluring prototypes into mass-produced vehicles more quickly.

One area where it has not had much to fret about: competition.

In the past year or so, several carmakers, including Audi, Jaguar and Porsche, have added heralded new models intended to cut into Tesla's electric dominance. But they have barely made a dent, at least in the United States.

Sales of the Jaguar I-Pace, an electric sport utility vehicle (SUV) similar to the Tesla Model Y, have totalled just more than 1,000 units this year. Porsche has reported similar sales for its electric sedan, the Taycan.

Audi, which has grown steadily in the US over the past decade, introduced an electric SUV, the e-tron, last year and sales have sputtered. So far this year, Audi has sold just under 2,900 units.

"Obviously, from the numbers we're seeing, these cars aren't setting the world on fire," said Mr Karl Brauer, an independent auto analyst. "It was a mistake to think that just because these cars were on the market that people were going to buy them."

General Motors has fared somewhat better with its Chevrolet Bolt, which the company introduced in 2016. It has sold more than 8,000 Bolts this year. Sales of the Nissan Leaf have topped 3,000 units.

Tesla, which does not break out sales by country, is operating at a different level. State data analysed by Cross-Sell shows that 56,000 new Teslas have been registered this year in 23 states, including California, Florida, New York and Texas.

Analysts said Tesla's 50-state sales total probably exceeded 70,000 cars. Globally, the company delivered about 180,000 cars in the first six months of the year.

Of course, electric vehicles (EVs), including Tesla's, represent a tiny proportion of auto sales, which totalled more than 17 million in the US last year.

Electrics are a bigger part of the new-car market in Europe and Tesla faces more competition there than in the US, but not a lot more.

China has many home-grown electric carmakers, but they tend to make cheaper vehicles that do not directly compete with Tesla's offerings. Regardless of the market, though, EVs are the fastest-growing segment of the auto industry.

Tesla's dominance can be explained in part by its head start.

It has been selling electric cars in significant numbers since 2012. The company and its chief executive officer Elon Musk have also built a fervent fan base that few other carmakers, save perhaps high-end sports car brands such as Porsche or Ferrari, can claim.

Tesla has long offered innovations other companies are only now trying to match, such as wireless software updates that can add features or fix glitches without trips to dealerships.

One of the biggest shortcomings of competing models is range - the distance an electric car can go before needing to be recharged.

The maximum for the e-tron and the Taycan is about 320km. The I-Pace and Bolt go about 378km to 418km. The least expensive Tesla Model 3 has a range of 402km and most of the company's cars go 482km or more on a single charge.

Mr Sam Abuelsamid, an analyst at Guidehouse Insights, said the Audi, Jaguar and Porsche vehicles were superior to the Teslas in some ways, such as look, feel and finish, but that their limited range had put off many buyers. "The difference is too great for a lot of consumers to ignore," he said.

Mercedes-Benz and BMW have been slower to introduce EVs in the US, where both companies plan to start selling new electric SUVs next year. Late last year, Mercedes-Benz delayed the introduction of its model, the EQC. And BMW, which introduced its i3 in 2014, has not built on that early start.

That has left the field open for Tesla and investors have taken note. The company's stock has soared this year, climbing from US$510 (S$706) in early January to about US$1,600.

The opening of a second assembly plant in China and the introduction of the Model Y have lifted optimism that Tesla will lead a global transition from petrol-powered cars and trucks to zero-emission EVs.

Moreover, a stronger competitive push may come soon.

By the end of the year, Ford Motor expects to start selling an electric SUV, the Mustang Mach-E, that is styled to look like the company's famous sports car.

It is promising a version of the car with a range of 482km or more.

GM will offer a new Bolt with longer range by the end of this year, followed by more than 20 other electric models over the next three years.

Volkswagen next year will begin selling an electric SUV, the ID4, which will also have a range of 482km. On Monday, the company started taking orders in Europe for the ID3, a hatchback that will sell for about €10,000 (S$16,046) cheaper than the Model 3. The car is not expected to be sold in the US.

And various start-ups are raising billions of dollars to challenge Tesla.

Among the most promising is Rivian, which is backed by Amazon, Ford and other investors. The Michigan-based company plans to bring out next year a pickup truck and an SUV that can go up to 643km.

Coming even sooner is a new company, Polestar, owned by Volvo and Volvo's Chinese parent, Zhejiang Geely Holding.

The Polestar 2 hatchback is supposed to go 442km before needing a recharge and has the kind of agility - zero to 100kmh in less than five seconds - that appeals to aficionados.

It will start at US$59,900 in the US and buyers will be able to claim a US$7,500 federal tax credit and state incentives. The company will also sell the Polestar 1, a sports coupe that starts at US$155,000.

Polestar recently opened sales centres in Santa Monica, California, and New York City. Sales are expected to begin in the next few weeks.

Other showrooms should pop up next year in Boston, Miami, Denver and elsewhere.

NYTIMES

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A version of this article appeared in the print edition of The Straits Times on July 25, 2020, with the headline Tesla ahead of the pack in electric-car market. Subscribe