Home WORLD NEWS Taunting Tesla: Mainstream brands are challenging Elon Musk’s reign

Taunting Tesla: Mainstream brands are challenging Elon Musk’s reign

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It will be difficult for anyone attending this week’s Geneva Motor Show to miss the massive banner hanging outside the city’s sprawling convention center.

“Your turn, Elon,” shouts the message from Hyundai promoting its all-new Kona, a mainstream-priced, long-range battery-electric SUV that targets a market segment that Tesla CEO Elon Musk only hopes to enter a couple years from now.

The PAL Expo convention center this week saw the debut of an assortment of electrified vehicles, both large and small, and ranging from affordable to exotic. More significantly, they offer far greater range, improved comfort and significantly more power than first-generation electric vehicles, such as the groundbreaking Nissan Leaf and Ford Focus EV.

That poses a potentially serious challenge for Tesla as it loses the technological edge that, until recently, made it a unique alternative to conventional cars.

“There’s a calculated assault coming from mainstream manufacturers,” contends David Sullivan, an automotive analyst with IHS Automotive. And it could spell serious problems for the California-based carmaker, he adds, especially if Tesla can’t resolve the production problems it is facing with its first mainstream battery car, the Model 3 sedan.

Image: Aston Martin Lagonda Image: Aston Martin Lagonda

The Aston Martin Lagonda is displayed at the 88th Geneva International Motor Show on March 7, 2018 in Geneva, Switzerland. Robert Hradil / Getty Images

Though production launched last July at the company’s plant in Fremont, California, a series of snags have left Tesla struggling far short of expectations. After announcing worse-than-expected earnings last month, Musk recently insisted production is “absolutely on track” to reach target by mid-year. Sullivan is one of many skeptics. And even if the Tesla CEO is right, he notes that the company will be well behind on meeting the estimated 400,000 or so advance reservations for the Model 3, some potential buyers now likely not to take delivery until 2019 or beyond.

Related: Is Tesla’s Model 3 likely to sink the company?

That is, of course, if they don’t ask for their $1,000 reservations back. And many appear to be doing just that, at least if Chevrolet dealers in some parts of the country are to be believed. They’ve been reporting that some potential Model 3 buyers have given up on waiting and are now buying Chevy’s own long-range electric, the Bolt EV.

Giving credence to that claim, General Motors CEO Mary Barra this week announced that the automaker will be ramping up production of the Bolt — which beat the Model 3 to market by about six months.

That said, Chevy’s expectations for Bolt are modest. Sales totaled just 26,000 last year. That was more than the Model 3, but if Tesla meets expectations, its compact electric sedan would generate sales of as much as 400,000 vehicles annually.

GM itself plans to launch two more battery-electric vehicles by mid-2019, and 25 by 2023. Volkswagen will have 50 coming for its various brands, and even launch an all-new sub-brand called I.D. That includes a fully electric take on the classic VW Microbus, to be called the Buzz, as well as the big Vizzion sedan that debuted in Geneva this week.

Image: VW I.D. Vizzion Image: VW I.D. Vizzion

The VW I.D. Vizzion is displayed at the 88th Geneva International Motor Show on March 7, 2018 in Geneva, Switzerland. Robert Hradil / Getty Images

VW’s Porsche brand has a high-performance model, the Mission E, coming that will challenge the bigger Tesla Model S, and Geneva saw the debut of the Mission E Cross Turismo expected to reappear as an all-electric SUV challenging Tesla’s Model X.

One of the selling points for Tesla has been the performance of vehicles with its optional Ludicrous Mode. The Model S P100D can hit 60 in barely 2.3 seconds, but automotive reviewers have noted that Teslas can only do so a handful of times without recharging, and when driven hard for more than a few minutes their batteries and motors tend to overheat, forcing the car into a sort of limp-home mode.

“Our vehicle will be fast to drive, but also quick to recharge and able to replicate its performance time after time,” Porsche CEO Oliver Blume said in Geneva, taking an obvious dig at its U.S. rival.

Related: What’s new at the Geneva auto show

Despite having a stratospheric stock price that dwarfs traditional automakers, Tesla has been struggling to fund its expansion program, starting with investments still needed to bring the Fremont plant up to capacity. A number of analysts, including CFRA’s Efraim Levy, believe it will have to soon raise additional capital.

Making matters worse, “Sales will hugely disappoint relative to expectations of over 400,000 a year,” Mark B. Spiegel, of Stanphyl Capital recently warned, adding his concerns that “Tesla will never come close to its promised profitability.”

Tesla has so far announced plans to add three more products to its own light vehicle line-up, including the Model Y, a compact SUV complementing the Model 3 sedan, a pickup and a new version of its original Roadster. Analysts believe Musk’s charisma and Tesla’s cutting edge reputation will keep many potential buyers in its corner.

But in an auto industry where even a modest product development program can run $500 million to over $1 billion, it simply may not have the resources to match what the competition is throwing at it.

Article Source : https://www.nbcnews.com/business/autos/taunting-tesla-mainstream-automakers-are-gearing-challenge-elon-musk-n855881?cid=public-rss_20180314