2015 sales of “large luxury cars” in the United States:
model |
2015 sales |
2014 sales |
% change |
Audi A7 |
7,721 |
8,133 |
-5.07 |
Audi A8 |
4,990 |
5,904 |
-15.48% |
BWM 6-series |
8,146 |
8,647 |
-5.79 |
BMW 7-series |
9,292 |
9,744 |
-4.64% |
Jaguar XJ |
3,611 |
4,329 |
-16.59% |
Lexus LS |
7,165 |
8,559 |
-16.29% |
Mercedes-Benz CLS-class |
6,152 |
6,981 |
-11.88 |
Mercedes-Benz S-Class |
21,934 |
25,276 |
-13.22% |
Porsche Panamera |
4,985 |
5,740 |
-13.15%
|
Tesla Model S |
26,566 |
18,480 |
43.76 |
Total |
100,526 |
101,793 |
-1.21% |
Mercedes is still the best-selling manufacturer when you combine their two vehicles in this class. But it’s clear that Tesla is eating into the traditional automakers with its single offering, and the trendlines are heavily in its favor. Given the choice between a storied premium brand or an electric upstart, an increasing number of buyers at this income level are choosing electric. (Perhaps that’s why all the German luxury brands have announced future electric models.)
The big prize, however, is the mainstream market, and Tesla is using revenue from its high-cost Model S and Model X SUV to fund development and production of its more mass-market Model E, to be unveiled in March and scheduled to hit the roads in 2017 or (more likely) 2018. While some worry (or hope) that lower gas prices forestall mass adoption of electric vehicles, current prices haven’t much affected the sales of Teslas to date. There are myriad more benefits to an electric vehicle than “cheaper than buying gas.”
That development, as well as new vehicles like the longer-range Chevy Bolt, Nissan Leaf, and potential future electric cars from Apple, Faraday Future, Uber and others, has got traditional automakers a little freaked out.
[Fiat Chrysler Automobiles CEO Sergio Marchionne] warned the adoption of electric technology risked continuing the process that he called “disintermediation”, under which carmakers have gradually lost control over elements of a vehicle’s contents to suppliers.
“It’s been a very steady, rigorous process of disintermediation,” said Mr Marchionne.
Having initially manufactured all their own components, carmakers currently retain primary control of making only vehicles’ powertrains — their engines and transmissions — he added.
“If we start losing any of that . . . we will not be able to hang on to any proprietary knowledge and control of that business,” said Mr Marchionne. “We won’t be manufacturing the batteries. We won’t be manufacturing the electric motors that are part of that powertrain.”
In other words, having outsourced everything in their cars except the powertrain (engine and transmission), a shift toward electric motors invalidates the most valuable part of their patent portfolios, and gives them no leverage against upstart companies. So after generations of zero new competition, the automakers face a veritable flood of California-based upstarts and a new technology arms race.
Given that more than one-quarter of greenhouse gasses are produced by the transportation sector, the shift toward electric cars would obviously have a real impact on the environment, particularly when coupled with renewable energy sources and better capture of smokestack pollutants at power plants. And self-driving technologies could allow for more efficient ride sharing services, further reducing the number of cars on the road and miles driven. (And parking spaces, too, with all their attendant problems!)
That premium luxury market may not encompass most people, but consider it a canary in the coal mine: With specs and features rivaling or exceeding traditional gas-powered cars, the demand for electric vehicles appears constrained only by price and range, and the trends on both of those favor EVs.