Is Audi Out to Crush Tesla?


Audi recently announced that it will unveil its all-electric E-Tron SUV on September 17 in San Francisco. Pricing is due to be released on that day as well. Audi began taking deposits on the new E-Tron back at the end of July before pricing and other details had been revealed, but it appears that news of the E-Tron has been met with much applause and anticipation.

The E-Tron is big news in a luxury EV industry that has been dominated by Tesla to this point. While Tesla has marked its territory as the leader and innovator in this market, critics continue to point out that Tesla has struggled with many things, including their ability to meet production demands.

Tesla’s dealer network, which is owned and operated directly by Tesla, has also taken heavy criticism for a poor customer experience and lack of ability to deliver on promises.

As of the end of Q1 2018, Tesla had an estimated backlog of 450,000 Model 3 reservations that had yet to be built. The huge backlog in demand prompted Elon Musk to erect a giant tent factory as a temporary solution to meet demand, which brought on jokes about his circus-like approach to auto manufacturing.

While Audi is tight-lipped about the number of pre-orders they have received for the new E-Tron, it is unlikely that the well-established German manufacturer would have to resort to building a temporary production facility in order to meet demand for their new EV SUV.

It will be interesting to see what price point Audi chooses for the E-Tron. Tesla’s Model 3 has an advertised starting price of $35,000, while it is speculated that the first wave of vehicles will be equipped and priced much higher than that.

As a side-note, Jaguar is also making a foray into the luxury EV territory with their new I-Pace which is due to hit dealerships in the coming weeks.  The 2019 Jaguar I-Pace is priced at just over $70,000 and has already been met with about 25,000 interested parties who have expressed intentions of buying one. Just like Audi, Jaguar should also not experience great difficulties in meeting demand.

So, the question of the day is whether big, established automakers like Audi and Jaguar will eventually put Tesla out of business. The short answer is: not likely. While Tesla has really struggled with its retail reputation and production management, Elon Musk and company have done a great job at building a brand and creating buzz.

If anything, the entrance of major manufacturers into the luxury EV market is validation for what Musk has been trying to do these last several years.