Tesla Motors Inc (NASDAQ:TSLA)’s highly anticipated next-gen electric car Model X is expected to hit the markets by the end of this year. The interesting thing is that none of the big league automakers could afford to produce a car that can rival Model S, giving Tesla Motors a strong edge in the electric vehicle niche. But its upcoming Model X will have a strong competitor with a much higher range.

Tesla Model X

“Tesla fighter” to have a 370 miles range

Earlier this month, German magazine Auto Bild said that Audi is working on a pure electric car, the Q8 e-tron, that will have a real-world range of up to 430 miles. Internally, this project is known as “Tesla fighter.” Now British magazine Autocar has confirmed that Audi has given the green light to the production of its Q8 e-tron. Citing Audi insiders as its sources, Autocar said that the Q8 e-tron will use the same electric powertrain technology and battery used in the upcoming R8 e-tron. However, Autocar reported the car’s range at 370 miles, compared to Auto Bild’s report of “up to” 430 miles. But that’s still higher than Model X’s expected range of 300 miles.

q8 e-tron

If that’s true, it will be a real competitor to Tesla Motors Inc (NASDAQ:TSLA)’s Model X. However, the Model X is likely to have a 2-3-year lead over the Q8 e-tron because Audi is expected to launch the model in 2016 or 2017. Audi Q8 e-tron will reportedly have a battery pack of at least 80kWh. Pointing to the latest developments in battery technology, Audi insiders said that they have increased the range of the upcoming R8 e-tron from 134 miles to 248 miles. And they expect battery technology to improve considerably by the time Q8 e-tron hits the markets in 2017.

Pricing to help Tesla in the battle

While Tesla Motors Inc (NASDAQ:TSLA) is anticipated to price its Model X between $60,000 and $80,000, Auto Bild said that Q8 e-tron will be priced at around $130,000. That gives Elon Musk a key edge in the battle. A prototype of Tesla Motors’ Model X was recently spotted near the company’s headquarters in California. Its four-wheel drive, 0-60mph in less than five seconds, seven seats and easy access gullwing doors have already attracted more than 6,000 people to pre-order the car.

Tesla Motors Inc (NASDAQ:TSLA) shares jumped 0.55% in pre-market trading Friday to $183.84.