Technology

Tesla Motors Inc To Be Challenged By Audi Electric Crossover

Tesla Motors Inc (NASDAQ:TSLA) will face direct competition from German automaker Audi, which is planning to roll out an electric crossover in 2017, targeting affluent and environmentally conscious consumers, according to Bloomberg. This will be the first conventional model from the company in the category of cars rolling on green energy.

Tesla Motors Inc To Be Challenged By Audi Electric Crossover

Change in strategy by Audi

In 2015, Audi is planning to launch an electric variant of its R8 sports car, which comes with a price tag of $115,900. Chief Executive Officer Rupert Stadler told Bloomberg, “Our engineers are working on an electric car that will meet the U.S. regulations for a zero-emission vehicle.”

Stadler said by all means, it will be a crossover, but development is still underway. The new crossover suggests a change in strategy for Audi, which earlier was in favor of introducing dedicated electric vehicles. Previously, Audi was more in favor of developing electric versions of existing models to limit costs.

Tesla is posing challenges to luxury automakers, and Audi is no exception. The Elon Musk-led company is working on its Model X sport-utility vehicle, which is expected to begin shipping in 2015.

Tesla tops consumer satisfaction survey again

Separately, in Consumer Reports’ owner satisfaction survey, Tesla earned the highest amount of points, comfortably sitting at the top of the heap. Audi was at the third spot behind Porsche, and Mercedes Benz was at fourth. The Palo Alto-based company grabbed the first spot consecutively for the second time in the U.S. survey. Tesla’s Model S scored 98 out of a possible 100, one point less than last year. Porsche was at a distant second place with a score of 87.

Consumer Reports said Tesla is not only roomy, comfortable and a lot of fun to drive, but also the operating cost is fairly low. The good news for Tesla comes a year after the car maker had to undergo an investigation over fires in the Model S after the car hits debris. Tesla came out clean after the investigation, bolstering Musk’s confidence and giving him time to expand sales of the Model S and continue the development process of the Model X SUV, which is expected to roll out in the third quarter of 2015.

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  • No Sun Beach

    ….. just in time for the Gubment to step in and argue they have an unfair monopoly and needs regulation and oversight .. (no relation to Gubment Motors BTW). But seriously, Tesla is a great American company, but I credit GM for being brave and taking one for team building an EV car that us common folks can actually afford to buy. Even if GM can’t really afford to sell.

  • rockyboulders

    If you think that Tesla would be better served to start small and then get big, then you’ve completely missed the boat on what Tesla is all about. Musk has said from the beginning that the strategy is to first make a “compelling” electric car…not a golf cart. The greatest hurdle BEVs face is not one of engineering, cost, or market…it’s about image, mentality, and style. Many companies have tried the “start small” approach and failed miserably because they can’t get over the BEV stigma. Tesla has made the BEV “cool”, which has more value and potential than selling millions of electric golf carts.

  • LakhiD

    I am the first to agree that ICE are inefficient, wasteful and polluting to boot.. and Electric cars are the future. The problem with tesla is the model S– Not the ideal size and not a suitable car for majority of families either for daily use or for that weekend trips with your family to your favourite off road fishing spot… or to the closest Billabong with the dogs.

    Unless battery technology improves it’s difficult see them competing against established gold standard — the ICE. And What good is a BE SUV in the middle of a jungle or in the middle of a desert? How are you going to fill-up? With a gasoline SUV most people carry an extra Jerry can just in case.. or can borrow gasoline from a passing motorist. And in the developing world ( Africa and Asia) people sell gasoline by the road side in cans and bottles. Can fill up anytime …and just takes only a few minutes.

  • DMS

    Tesla’s detractors used to scream out that a BEV was a pipe dream, they’re still screaming, but this time they’re saying that the large old ICE car makers are going trash Tesla out of the BEV market. What’s Musk’s response to that? It’s the same answer he’s had from day one: BEV’s are the future, there’s room for everyone at the table,all you have to do is abandon your old ways, I’ll help you make the switch from ICE Vehicles to BEV’s, you can use our technology if you like.

  • DMS

    Have You ever heard of the Model 3? Musk has all along been very clear where he was going. For a compact mass market BEV, you’ll have to wait till the Gigafactory goes operational.
    Tesla’s detractors used to scream out that a BEV was a pipe dream, they’re still screaming, but this time they’re saying that the large old ICE car makers are going trash Tesla out of the BEV market. What’s Musk’s response to that? It’s the same answer he’s had from day one: BEV’s are the future, there’s room for everyone at the table,all you have to do is abandon your old ways, I’ll help you make the switch from ICE Vehicles to BEV’s, you can use our technology if you like.

  • john

    jobs drove a SL 500. Also at that price point you have to make something that people will buy, ie similiar to other vehicles in that price range. The tesla cost that much because the R&D and manufacturing cost for the battery are pretty high ($30K+) http://www.greencarreports.com/news/1084682_what-goes-into-a-tesla-model-s-battery–and-what-it-may-cost

  • Pierre

    What you are saying is true, but it doesn’t change the fact that Toyota and Nissan cars are ugly and boring to drive. Steve jobs, Warren Buffet, they do not care about cars, thats why they don’t buy flashy cars. Also, I wouldn’t be suprised if they buy a Tesla because its so revolutionnary.

  • LakhiD

    SUVs may not leave the pavement in California but many countries around the world do not have paved roads or…. they end suddenly. An most countries in Europe, Africa, Australia and Asia — have mountains, forests and Jungles. It’s common for families in these countries to go ” off the road ” with families over the weekend and an SUV( Space, Utility and Versatility ) is considered an essential vehicle for many families. Very few people in Europe drive to work in an SUV.

    A start-up producing a car to rival established brands – let alone an electric one – is no mean feat. But if you are loaded and willing to spend money you can hire the best to do the job . ie: hire engineers from Lotus to design suspension. Most film stars and models to do the same, to sell their branded products. Most star branded perfumes are produce for them by established perfume manufacturers –and stick a label.

  • LakhiD

    Most high achievers — people who have inherent value and do not need a flashy expensive car to project their image — drive very ” mediocre ” cars. Kamprad, Buffet, Steve Jobs — to name a few.

  • Pierre

    Good Point, also If I’m not mistaken the Model S P85D is faster than the R8

  • Pierre

    Good Point :)

  • Pierre

    Because Toyota SUVs are ugly and boring cars. It also depends on if you want to project a mediocre image of yourself by buying cheap cars ( Toyota, Nissan) or real cars such as Tesla

  • Pierre

    Well said ! I also own TSLA shares and I’m planning to buy model S and X

  • MikeInHB

    Obviously Tesla is light years ahead of its competition (If you want to refer it as that). Elon Musk is changing the automotive and energy industries. I am long with anything Elon touches. I own TESLA, I am not trading it.
    Hopefully in 10 years I will cash out with a huge payout.

  • Brokinarrow

    I’d definitely like to see the specs for Audi’s sedan… do they expect it to get similar range to the Tesla Roadster? or will it be more in line with the Leaf? If it’s the latter, then I fail to see the market for it. Why buy a $100,000 electric car that has the range of a $40,000 electric car when you could just get a Tesla that has 280 mile range?

  • Brokinarrow

    The new Tesla models have available AWD, I’m not sure why you think a family hauler vehicle needs four-wheel drive. Even most Jeeps and four-wheel drive SUVs never leave the pavement. There are plenty of uses for a full sized sedan, and the Model S puts other luxury sedans to shame in every aspect.

  • LakhiD

    Today, vast majority of families have two vehicles – one small city car for daily use — to get to work, shopping, etc– and a larger wagon or a crossover (or an SUV ) for long week end trips with the family( and dogs). So the ideal combination is a small electric car for work and a big wagon or an SUV for the weekend. Tesla in neither: too big for daily trips to work –most European and Asian cities where streets can be very narrow and congested — and not suitable for weekend trips due to low ground clearance and lack of four wheel drive. For USD 100,000, one could buy a Nissan Leaf and a Toyota SUV that will cover 99% of your needs. Saloon car sales are falling rapidly why Tesla decided to put out a big saloon car is a mystery.

  • Lacci

    They wait, they need to see the model X, because they want to steal ideas from it.

  • Calamity

    Can the Audi use the Superchargers?

  • meltoots

    Um when I see the Audi actually on the road, let me know. Its vaporware right now. Anyone can SAY they are doing something. Lets see you do it. And by the way 3 years from now. Tesla is now and basically kickin butt.

  • Brokinarrow

    true, but at least the other companies are finally TRYING to compete now :) Competition is good for business.

  • negative

    do you have any positions on TSLA, you put a lot negative news on the company recently

  • Marc Edwards

    apples and oranges.. The Model S is a sport sedan i.e. four door family vehicle, the Audi R8 is a two-door sports car, with no back seat.
    Until another company comes out with a FULL SIZE 5 passenger all electric SEDAN with a ~250 mile range, there is NOTHING to compare the Model S too..
    While an electric R8 is a nice idea, like the BMW i8, it will only be attractive to a very small and limited group of people.

  • Mavi57

    They will be 2 years late. Model X coming out next year. So they better do a good job if they want to compete with Tesla.