In 2019 and beyond, luxury automakers are betting big that the luxury market for electric and hybrid cars is still very much untapped.
The politics of energy policy are just like any other politics, contentious and usually unproductive. Yet, while legislatures and chief executives dither about with their arguments, automakers on the free market believe that regardless of how the politics play out, customers are curious and want electric cars. Place the claimed environmental benefits aside for a moment, and they are still highly desirous cars. They run very quiet, are cheap to power, and (at least now) come packed to the gills with features and amenities one expects from luxury cars. Also, with each successive generation, these vehicles perform better. They aren’t quite up there in terms of power and speed as, say, the fastest American cars on the market. However, according to CNN, automakers are making a play for luxury electric car market currently cornered by Jaguar and Tesla.
2018 Was a Show-and-Prove Year for the Luxury Electric Car
If the luxury electric car does take the market by storm this year or in the oncoming years, Tesla will be a large reason why. Ambitious (but eccentric) CEO Elon Musk went all-in on his electric car company, so much so that he seemed content operating the business at a loss. This year was meant to be the year that Tesla showed its shareholders that it could turn a profit. It’s not that they weren’t selling cars, they had a better problem. They couldn’t make them fast enough. Tesla eked out ahead, but not without tumult. Musk faced penalties after speculating on Twitter that he was going to take the company private, which in turn falsely elevated Tesla’s stock price.
Still, Musk’s public relations mishandling aside, the company’s customers who have their cars are quite happy with them. One Tesla owner from Pennsylvania, named Justin, who we spoke to waited about a year for his vehicle. That process was frustrating and tough to deal with. However, at no point did he want to just get something else. When he finally accepted delivery of his car, he couldn’t stop raving about how much he liked it. Other companies like Jaguar, who both make the new I-Pace and are offering retrofits of electric motors to their classic models, help things along. But Tesla was the pioneer in this field. However, they are about to have some company.
2019 Could be the Year of the Luxury Electric Car
A number of luxury car makers are planning to unveil new models to compete in the luxury electric car market. They are also looking at the luxury SUV market, with all-electric models meant to compete both with gas-guzzlers and hybrids. Their signature model, the E-Tron is not set for release until the fall, as part of the 2020 line of cars. This luxury SUV will come in sporty GT and a “Sportback” option to be revealed.
Mercedes-Benz also has an all-electric, sporty SUV, the EQC, set to debut in the fall. This model looks very much like its combustion-engine cousins but presents a slightly sleeker profile.
The third model debuting in the fall will be BMW’s iX3, however this isn’t a fully-electric model. Thanks to what BMW calls “’flexible’ engineering,” the iX3 will be available in fully-electric, hybrid, and traditional combustion engine models. Of all of them, this will be a true test case of how desire for the luxury electric car in 2019 compares to hybrid and traditional cars.
Following this, BMW will offer the Vision iNext, an electric SUV that looks more like a spaceship than a car. Of course, it’s not just SUVs that are forthcoming. A new automaker start-up in Detroit, Rivian, is going for the market least likely to make the switch. Their fully-electric pick-up truck, the R1T promises “genuine off-road capability” and the power needed to haul the things pick-up truck drivers tend to haul. They will also offer an SUV, the R1S. However, these are expected to debut until the latter part of 2020. Porsche will also enter the fray, albeit with a luxury sports car called the Taycan. While other luxury electric car models can get to 60 mph faster, Porsche claims this vehicle will have a “level of continuous power unmatched” by its competitors.
One Thing the Luxury Electric Car Needs to Really Hit
A variety of impressive models is one part of the solution to the electric car problem, however that’s not all the market needs. The cost benefits of cutting gasoline out of your driving live are obvious and irrefutable. Yet, even the most frugal of luxury car owners knows that you still see far more gas stations than you do charging stations. Sure, a lot of that charging can be done at home. However, especially for people who spend a lot of time on the road, the ability to charge up their luxury electric car wherever they stop is key. Yet, this is a problem that the free market may not be equipped to answer. Businesses would have to make investments in the infrastructure for charging stations. They also would likely have to charge for it, because electric power still costs money.
It’s also unlikely that gas stations or “charging stations” as a business can ever prop up. Thanks to physics and its strict laws, it seems almost impossible at our current level of technology to make “filling up” a luxury electric car as quick and convenient as putting $60 in the gas tank. But, if someone comes up with a creative kind of combo business, where charging stations are offered and people are given something to distract themselves, like restaurants, shopping, or even a movie theater, while the car powers up. Of course, the other problem is that business that crack this code have to worry that advancements in battery technology will make the need to recharge much less frequent as time goes on.
The luxury electric car is definitely the future of the auto industry, but how far away that future is remains to be seen.
Even the most basic axioms of economics show that the future of the auto industry is electric. With volatility in energy markets (and the countries that produce the oil) as well as a finite supply of the resource means we will eventually have to move on from gas. That these electric cars give off zero emissions make them ultimately better for the environment is, unfortunately, just a bonus. Yet, in this case, the automakers have much more power than anyone else in the game. Because if they are investing their money and potential earnings into the luxury electric car market, they are going to try their damnedest to force success. Of course, if these models deliver on their promises, drivers will want these cars.
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