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Mercedes aims for Tesla with new electric SUV

Sept 05,2018
Mercedes-Benz will unveil its much-anticipated electric SUV on Tuesday Swedish time, marking the start of a German onslaught against Tesla’s dominance of the fast-growing market for premium electric cars.

Mercedes, BMW and Volkswagen’s Audi and Porsche divisions are all gunning for the $52 billion Californian upstart, with early publicity efforts emulating its tech-industry halo.

The market for upscale electric cars is Tesla’s to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 this year and almost double that in 2019.

The Mercedes EQC - whose launch program in Stockholm features yoga in a direct appeal to the millennials who have flocked to Tesla - is the first production model under the carmaker’s electric EQ sub-brand. It will be closely followed by similarly hyped debuts from BMW and Audi.

“While Tesla currently has a strong hold on the luxury electric market, I don’t think this will be the case after the arrival of the German premium offerings,” said Wajih Hossenally, an automotive powertrain analyst with IHS Markit.

“Tesla has virtually zero competition - but this will change.”

Rival forecaster LMC Automotive agrees, predicting a steady decline in Tesla’s share of an exploding electric-car market over the next decade, from today’s 12.3 percent to 2.8 percent, even as its absolute sales continue to rise.

The Germans’ combined market share will surpass Tesla’s to reach 11.8 percent in 2020 before increasing further to about 19 percent three years later, according to its projections.

The new Mercedes, due to reach its first customers next year, will be priced close to the fuel-burning GLC to compete in the same bracket as Tesla’s $49,000 Model 3, helped by its hotter-selling SUV form.

An affordable Model Y SUV is slated to join Tesla’s high-end Model X crossover and Model S car, but not before 2020-21. The EQC softens its higher-riding proportions with sporty curves and a distinctive full-width rear light, while the interior resembles that of the Mercedes C-Class - a reminder of the economies of scale that the electric-only Tesla cannot match.

Well aware that their earlier battery-car offerings have failed to reach Tesla’s level of public attention, the German brands are doggedly trying to build Silicon Valley-style buzz for the coming product blitz.

Executives including Mercedes Chief Executive Dieter Zetsche have taken to appearing in jeans and sneakers, responding to a broader tech-industry incursion into areas such as autonomous driving and connected services.


Reuters