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STOCKHOLM / PARIS, Sept. 3 (Reuters) – Mercedes-Benz is set to unveil its much anticipated electric SUV on Tuesday, marking the start of a German attack on Tesla's dominance of the booming high-end battery market.
The Daimler-owned Mercedes, BMW and Volkswagen divisions, both for the Audi and the Porsche, have embarked on the $ 52 billion Californian adventure.
The high-end electric car market is to be lost for Tesla, sales of its entry-level model 3 sedan to reach about 50,000 cars this year and almost double that in 2019.
The Mercedes EQC – whose launch program in Stockholm presents yoga in a direct appeal to Millennials who have flocked to Tesla – is the first production model under the manufacturer's EQ electric sub-brand. It will be closely followed by similar debuts at BMW and Audi.
"While Tesla currently holds a strong grip on the luxury electricity market, I do not think that will be the case after the arrival of German premium offers," said Wajih Hossenally, an analyst at IHS Markit.
"Tesla has virtually no competition – but that will change from 2019".
The rival forecaster LMC Automotive agrees, predicting a steady decline in Tesla's share in the exploding electric car market over the next decade, from 12.3 percent to 2.8 percent, then same as its absolute sales continue to increase.
The combined market share of Germans will exceed that of Tesla to reach 11.8% in 2020 before increasing again by about 19% three years later, according to his predictions.
The new Mercedes, which is expected to reach its first customers next year, will be sold at the same price as Tesla's GLC at $ 49,000, thanks to its higher-consumption SUV shape.
An affordable Y model SUV should join the Model X high-end hybrid model and the Tesla S model, but not until 2020-2021.
TECH BUZZ
The EQC softens its higher proportions thanks to its sporty curves and its characteristic full width taillight, while the interior looks like that of the Mercedes C-Class, recalling the economies of scale to which Tesla , only electric, can not compete.
Well aware that their old battery offerings have failed to attract Tesla's public attention, German brands are fiercely fighting the new blitz product.
Executives, including Mercedes CEO Dieter Zetsche, began appearing in jeans and sneakers, responding to a broader industry foray into areas such as autonomous driving and connected services.
Regarding the launch of the EQC, Mercedes chose the city of Stockholm for its startup scene and its ecological credentials, and then began to launch teasers on Instagram and Twitter.
Like Tesla, Mercedes announces EQC orders in Norway even before its price. It has amassed more than 2,000 refundable deposits of 20,000 kroner ($ 2,400) on Europe's largest electric car market, where Tesla sold 8,500 vehicles last year.
The launch is the centerpiece of a three-day event that features DJ sets and yoga with a YouTube star – almost literally turning to the telegraphs of the 21st century.
Audi began production of its e-Tron SUV on Monday before launching the sales launch on Sept. 17 in San Francisco, just 40 miles from Tesla's Fremont assembly plant. He also plans to start taking reservations with $ 1,000 refundable deposits.
The e-Tron is expected to arrive in the exhibition halls early next year, followed in 2020 by two additional electric Audis and the Porsche Taycan sports car from its Volkswagen group partner.
WOW FACTOR
Not to be outdone, BMW has hired a Lufthansa cargo plane to fly its Vision iNext electric – still a concept car – from Munich to Beijing via New York and, of course, San Francisco. Events are planned in the four cities over five days.
In another movement inspired by Tesla, the three German automakers are developing their own network of fast chargers along major highways, in partnership with Ford.
While some experts doubt that the Germans can match the wow factor around Tesla and his founding boss, Elon Musk, many are also wondering if they need it.
"German automakers have high-end cars in their DNA that are fun to drive," said Nicolai Mueller, a McKinsey partner based in Cologne. "It's a very good starting point."
Tesla has used its powerful technological aura to persuade early adopters to pay a premium for an all-electric car from an unknown stranger, with no trace of quality or physical concession for maintenance and assistance.
But German manufacturers have a century of manufacturing behind them, with prestigious brands, well-developed global sales networks and an existing customer base of several million.
BMW i3 mini and an old Audi e-Tron have not managed to shift large volumes, but the electric car market has evolved ever since. LMC sees China driving global sales growth above 50% a year while the German offensive is launched in 2019-2020.
From here, the flagship Model S will be eight years old. Musk, tweeting and then withdrawing his plans to privately take Tesla, reinforced doubts about the company's ability to continue developing and updating its range.
"Tesla could face a shortage of products from 2020," said last year, Philippe Houchois, analyst Jefferies, in a note.
Tyler Martin, a Tesla owner in Tucson, Arizona, said he had not yet decided to buy a Model 3 after his current Model S suffered from "manufacturing quality" problems requiring multiple trips each year.
A big question is whether competitors can offer a viable alternative to the Tesla owner's fast charging network, said the 28-year-old software contractor.
If they can, adds Martin, "I would definitely consider another brand".
(Report by Esha Vaish and Laurence Frost, additional report by Joe White in Detroit and Edward Taylor in Frankfurt, edited by Mark Potter)
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