In Electric Car Market, It’s Tesla and a Jumbled Field of Also-Rans

Source: By Neal E. Boudette, New York Times • Posted: Wednesday, July 22, 2020

Most traditional carmakers are struggling to produce and market electric vehicles even as Tesla sells hundreds of thousands of its luxury models.

One area where it hasn’t had much to fret about: competition.

Over the last year or so, several automakers, 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 similar to the Tesla Model Y, have totaled just over 1,000 this year. Porsche has reported similar sales for its electric sedan, the Taycan.

Audi, which has grown steadily in the United States over the last decade, introduced an electric S.U.V., the E-tron, last year, and sales have sputtered. So far this year, Audi has sold just under 2,900. In many states, the car is advertised at prices 13 percent or more below its list price — unusual for an Audi.

“Obviously from the numbers we’re seeing, these cars aren’t setting the world on fire,” said 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. The company has sold over 8,000 Bolts this year. Sales of the Nissan Leaf have topped 3,000.

Tesla, which does not break out sales by country, is clearly operating at a different level. State data analyzed 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.

The 2020 Audi E-tron, in white, next to a 2021 version, in blue, at the auto show in Los Angeles last year.
Marcio Jose Sanchez/Associated Press

Of course, electric vehicles, including Tesla’s, represent a tiny proportion of auto sales, which totaled more than 17 million in the United States last year. Electrics are a bigger part of the new-car market in Europe, and Tesla faces more competition there than in the United States, but not a lot more. China has many homegrown electric carmakers, but they tend to make cheaper vehicles that do not directly compete with Tesla’s offerings. Regardless of the market, though, E.V.s 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, Elon Musk, have also built a fervent fan base that few other automakers, save perhaps high-end sports car brands like 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 Taycan is about 200 miles. The I-Pace and Bolt go about 235 to 260 miles. The least expensive Tesla Model 3 has a range of 250 miles, and most of the company’s cars go 300 miles or more on a single charge.

Sam Abuelsamid, an analyst at Guidehouse Insights, said that the Audi, Jaguar and Porsche vehicles were superior to 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 electric vehicles in the United States, where both companies plan to start selling new electric S.U.V.s next year. Mercedes late last year 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 $510 in early January to about $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 gasoline-powered cars and trucks to zero-emission electric vehicles.

Of course, Tesla’s success is not guaranteed. It hasn’t reported an annual profit since its founding in 2003. The company has struggled to match the quality levels of traditional automakers, and it is spending heavily on Model Y production and developing a pickup truck, a semi truck and other vehicles. It is also building a third factory in Germany, and planning a fourth.

An Rong Xu for The New York Times

Its Autopilot driver-assistance system has won widespread attention, but its shortcomings have come under scrutiny after fatal accidents during its use. This month, a German court ruled that Tesla had exaggerated the system’s abilities and created the false impression that Tesla cars with Autopilot could drive themselves. The company has long claimed that the data collected by its cars shows that the system makes its cars safer than others on the road.

Officials at Tesla did not reply to requests for comment.

Moreover, a stronger competitive push may come soon. By the end of this year, Ford Motor expects to start selling an electric S.U.V., 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 300 miles or more. G.M. has said it 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 S.U.V., the ID4, which will also have a range of 300 miles. The company on Monday started taking orders in Europe for the ID3, a hatchback that will sell for about 10,000 euros less than the Model 3; the car is not expected to be sold in the United States.

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 company, which is based in Michigan, plans to bring out next year a pickup truck and an S.U.V. that can go up to 400 miles.

Coming even sooner is a new company, Polestar, owned by Volvo and Volvo’s Chinese parent, Zhejiang Geely Holding. The Polestar 2 is a hatchback that is supposed to go 275 miles before needing a recharge and has the kind of agility — zero to 62 miles an hour in less than five seconds — that appeals to aficionados. It will start at $59,900 in the United States, and buyers will be able to claim a $7,500 federal tax credit and state incentives. The company will also sell the Polestar 1, a sports coupe that starts at $155,000.

Damon Casarez for The New York Times
Damon Casarez for The New York Times

Polestar recently opened sales centers in Santa Monica, Calif., 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.

The company has made a big bet on technology. Its cars are controlled by Google’s Android software, which enables drivers to operate many parts of the vehicles through the same kind of natural voice commands that many people use with smartphones.

“You can use Google Assistant to utilize everything from maps to changing the climate in your car to asking trivia questions,” said Gregor Hembrough, the head of Polestar’s U.S. operations and a Volvo veteran.

And since Polestar is an E.V.-only company like Tesla, Mr. Hembrough is counting on pulling customers from traditional carmakers, not just its bigger rival. He said the company expected to sell “thousands” of cars this year, and “tens of thousands” in 2021.

“Right now, there’s only one party in town,” he said.

Jack Ewing contributed reporting.