Business World

Thursday 29 September 2016

German giants step up a gear to battle e-car pioneer Tesla

Andreas Cremer

Published 15/09/2015 | 02:30

An employee covers a Tesla Model S car during the media day at the Frankfurt Motor Show.
An employee covers a Tesla Model S car during the media day at the Frankfurt Motor Show.

The high-performance electric car market is shaping up to be a high-profile battleground featuring some of the world's most glamorous brands after Porsche and Audi unveiled models to challenge US pioneer Tesla Motors.

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Up to now consumers have largely shunned electric vehicles because of their high price tags and limited driving range, as well as the scarcity of charging stations, though many analysts predict sales will rise sharply by the end of the decade.

Elon Musk's Tesla, however, has enjoyed success and managed to stay ahead of the pack with new technology, which has extended driving range and reduced costs.

Germany's Audi and Porsche - Volkswagen's two premium flagships - showcased purely battery-powered cars at the Frankfurt auto show on Monday.

The impact on Tesla is not clear cut, according to analysts. As two of the world's most sought-after auto brands, they represent heavyweight competition for the attention of wealthy, environmentally conscious buyers. But they also boost the credibility and cachet of the all-electric market, which could benefit Tesla.

"It will certainly sharpen the public focus on electric vehicles and raise overall awareness. Consumers are also set to gain from growing offerings of electric cars, especially in the performance segment," said Commerzbank analyst Sascha Gommel.

Audi unveiled its e-tron quattro sport-utility concept - its first electric model designed for series production - and Porsche its first-ever battery-powered sports car in Frankfurt.

Neither car will be available to buy until around 2018, but the launches are perhaps aimed at stealing the limelight from Tesla's first luxury electric crossover, the Model X, ahead of its planned start of deliveries on September 29.

Audi had initial misgivings over whether to launch dedicated electric vehicles, a reticence which some analysts said risked making them look like a laggard in an industry where innovation is a major draw for customers.

But German brands may rapidly close the gap with Tesla on engine and battery technology, said Laurent Petizon, a consultant with AlixPartners.

Reuters

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