Tesla Motors is one of the smallest automakers in the world, and yet, worth over $20 billion, is proving to be quite the thorn in the side of established companies.
Despite the fact that Tesla Motors has asserted that it is a performance vehicle manufacturer, it isn’t hard to believe that, closing in on $100,000 for the Tesla Model S, people mistake the Tesla Model S for a luxury car. After all, the Tesla Model S comes with all the luxury features that you would expect in something like a Lexus LS600h, BMW 7-Series, or Mercedes Benz S-Class.
So, what are these other automakers going to do about the Tesla Model S? It seems that automakers are aiming for Tesla Motors with the best technology they can throw at it. Take, for example, the BMW i3, a compact luxury electric vehicle, which just started production, starts at just over $41,000, or $45,000 with the range extender. Of course, the i3 isn’t proper competition for the Tesla Model S, but just a preview of BMW’s venture into electric vehicles, such as the BMW i8 performance plug-in hybrid electric vehicle [PHEV]. It’s not pure electric, but it could take some attention away from upstart Tesla Motors.
On the other hand, one thing that could prove to be in BMW and other automakers’ favor is the fact that Tesla Motors is so small, in terms of production capacity. To date, Tesla Motors produces just 20,000 vehicles per year, while global leader Volkswagen produces over nine million vehicles per year. Tesla Motors has no stock of vehicles, because they’re being sold as fast as they can make them. If just one of the big automakers, with their much-larger production capacity, can produce a vehicle that captures the attention of the electric-vehicle public, it could be a blow to Tesla Motors.
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