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The Electric Cars From Germany Are Coming. Should Tesla Be Worried?

Mercedes, BMW, and Audi are rolling out their latest electric car offerings this week. But analysts say Tesla has little to be worried about.

Mercedes will take the wraps off its EQC electric car at an event in Sweden on September 4. Audi will (finally) introduce its long-awaited and oft delayed e-tron electric SUV on September 17 in San Francisco. Next Sunday, BMW will officially introduce its i-Next in Munich. Are these the cars that will turn customers’ eyes away from Tesla and back toward the traditional manufacturers?

Image courtesy Daimler

Not very likely, some market analysts say. According to Handelsblatt, the first electric offerings from all three companies are compromise cars, built on existing chassis originally designed for cars powered by internal combustion engines and using traditional assembly line procedures.  “A new, uncompromising product will in all likelihood not be created in this manner,” says Arndt Ellinghorst, an analyst at Evercore ISI. “Germany’s first, real electric cars will be expensive compromises between the old and new world.”

Peter Fuss, an analyst for EY, an automotive industry consulting company, more or less agrees with Ellinghorst. “As opposed to some earlier models, these offers are serious contenders. They can conquer a niche market, but they won’t be able to become a hit on the mass market.”

Are the German electric cars just new wine in old bottles? If so, the industry is going to face some difficult times ahead. European emissions rules are set to tighten considerably beginning with 2020 models. If the public response to the offerings from Mercedes, Audi, and BMW are tepid, those companies face the prospect of multi-billion Euro fines from regulators. They are caught between a rock and a hard place as they try to compete with Tesla while keeping customers, stockholders, unions, and regulators happy. There could be a “Nokia moment” looming ahead for one or more of the trio.

Tesla’s Model S is outselling the top-of-the-line Mercedes S Class, the BMW 7 Series, and the Audi A8, and it is doing it not only in America but in Europe as well. While those cars are not volume sellers, clearly Tesla has hit those companies where it hurts — prestige. And despite the glitzy unveilings coming this week, none of the new electric cars from German automakers will be on sale any time soon.

Audi e-tron electric SUV

Image courtesy Audi

Production of the Audi e-tron electric SUV began at a modernized assembly plant in Brussels on August 3 with sales expected to begin before the end of this year. Audi says the car has a 95 kWh battery and a range of about 250 miles. 0-60 time is expected to be less than 6 seconds. Those numbers are OK but not scintillating. The e-tron is also priced about $10,000 more than a comparable Model X.

The Mercedes EQC will not be available to customers until next summer. It has a range that is about 10 miles less than the base Model S. The BMW i-Next won’t be in showrooms until sometime in 2021. According to reports, the i-Next will feature next generation batteries, but details about what that means are few. In the meantime, BMW plans to introduce a battery electric version of the MINI next year and an electric X3 SUV in 2020.

The German car makers are planning to invest up to $50 billion dollars in the next 3 years to bring electric cars to market. So far, their efforts have been tepid affairs that do not break new ground in terms of styling, performance, range, or technology. Nobody is standing in long lines to reserve one as they did for the Tesla Model 3.

While short sellers have been betting heavily against Tesla for years (although not so much lately), a case could be made that the real short selling opportunity is in shares of Mercedes, BMW, and Volkswagen as the next 3 to 5 years will present significant marketing challenges for all three. Branding can only carry a business so long. Just ask the people at Nokia and Blackberry about that.

Update: The following information about the EQC has just been published by Mercedes-Benz:

Mercedes-Benz is flipping the switch. The new EQC is …

… the first Mercedes-Benz under the product and technology brand EQ

  • EQ stands for “Electric Intelligence”
  • It is derived from the Mercedes-Benz brand values of “Emotion” and “Intelligence”
  • The EQC (combined power consumption: 22.2 kWh/100 km; combined CO2emissions: 0 g/km, provisional figures)1 is part of a growing family of all-electric vehicles from Mercedes-Benz
  • Conceived to meet all the requirements for a battery-electric drive system
  • Convincing in the sum of its attributes with respect to comfort, quality and operating range
  • An electric range of more than 450 km according to NEDC (provisional figure)1

… progressive in design

  • Pioneer of an avant-garde electric look
  • Progressive luxury points the way to the future
  • Large black-panel surface as a striking front feature
  • Optical fibres as a visual link to the torch-like daytime running lamps
  • Sporty, stretched silhouette
  • Innovative interior design inspired by the world of consumer electronics

… excitingly dynamic

  • A compact electric drivetrain at each axle, with a combined output of 300 kW
  • Superior driving characteristics of an all-wheel drive vehicle
  • Various driving modes with different characteristics
  • Battery recuperation can be adjusted as the customer requires, using gearshift paddles behind the steering wheel. In “D Auto” mode, the EQC can also adapt recuperation according to the situation with the aid of ECO Assist

… the Mercedes-Benz among electric vehicles

  • Latest-generation driving assistance systems with new tailback management functions
  • Extensive crash test programme
  • Stringent additional requirements for the battery and all components carrying electrical current
  • Pre-climatisation means no scraping ice in the winter and no perspiration in the summer
  • Extremely quiet interior
  • Trailblazing MBUX multimedia system – Mercedes-Benz User Experience with numerous EQ-specific functions
  • A trailer coupling is available on request. The maximum towing capacity (braked) is 1800 kg
  • Integration into ongoing series production at the Mercedes-Benz plant in Bremen
  • Battery produced by the Daimler subsidiary Deutsche Accumotive

… more than just a car, and a symbol of a new era in mobility

  • Comprehensive services for the electromobility of today and tomorrow
  • Relaxed, uncomplicated travel with transparency and planning certainty
  • Dialogue with visionaries, business people and opinion leaders in the “EQ Community”
  • Entry into Formula E for the 2019/20 season
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Written By

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."


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