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Plug-ins Lose Out To Battery-Only Vehicles – Dudenhoeffer

Plug-ins Lose Out To Battery-Only Vehicles – Dudenhoeffer.

Tesla Eating Into High End Mercedes, Porsche, Audi, BMW Sales.

“Tesla’s range of up to 450 kilometres makes the cumbersome plug-in art rather uninteresting. This makes it high risk that the premium manufacturers have invested in the wrong technology”

The German premium car makers have invested hugely in plug-in hybrid electric vehicles, but one expert believes this is a cul-de-sac, and Tesla Motors’ all electric approach is already eating into their high-end sales.

Professor Ferdinand Dudenhoeffer, director of the Center for Automotive Research (CAR) at the University of Duisburg-Essen, said not only have they wasted money on the blind-alley of plug-in hybrids, they are losing sales in the most profitable end of the luxury market to Tesla. Rich people who have formerly bought the flag-ship Mercedes S-Class, BMW 7 Series and Audi A8 are turning to the Tesla Model S.

Plug-in hybrids combine an internal combustion engine with a battery powered electric motor. The battery-power typically allows up to about 30 miles of electric-only driving, while the gasoline engine has the range of a traditional motor. The battery can be recharged independently, or, while free-wheeling on the road. The battery on regular hybrids can’t be charged independently and only allows maybe one mile of battery-only operation. The problem is the two power plants add a huge amount of weight. The complexity adds big extra costs.

Fuel cells
But in the race to provide green buyers with much better fuel consumption and lower carbon dioxide (CO2) emissions, plug-in hybrids were thought to have the inside track on battery-power, at least until fuel cells become competitive by around 2025.

IHS Automotive recently looked again at its medium to long-range forecasts and raised its prediction for battery-only vehicles in 2020 a bit to just one per cent of the global market from just under one per cent. This will creep up to 1.5 per cent by 2025. IHS Automotive said hybrids and plug-in hybrids market share will rise to seven per cent in 2020 from a previous estimate of almost five per cent, and accelerate to 16 per cent from its previous prophecy of just over six per cent in 2025.

But according to Dudenhoeffer, this isn’t going to happen. Plug-in hybrids are not proving popular with buyers. They are also seen as not very environmentally friendly because most plug-in hybrid drivers will use internal combustion engine power for most the time.

In a report called “Tesla asserts itself in the luxury class”, Dudenhoeffer said that even in markets like Germany and Switzerland where there are no subsidies for electric vehicles, the Tesla Model S is grabbing sales from the likes of the Mercedes S class.

Dudenhoeffer’s remarks came in the week when Morgan Stanley analyst Adam Jonas raised his target price for Tesla Motors shares to $465 from its current level of close to $240, predicting that the company will forge ahead in the race for so-called “app-based, on-demand mobility”.

Dudenhoeffer said Tesla’s batteries check-mate plug-ins.

“Tesla’s range of up to 450 kilometres makes the cumbersome plug-in art rather uninteresting. This makes it high risk that the premium manufacturers have invested in the wrong technology,” he said.

And in Germany at least, Europe’s biggest single market for cars, plug-ins aren’t seen as very green and are demonstrating a misstep by the German premium car makers.

Weight too high
“I think plug-in hybrids are the wrong direction and will not be successful. The costs are too high. The weight of the car is too high,” Dudenhoeffer said in an interview.

“I think environmentalists and governments will come to the conclusion that plug-in hybrids are not real progress. I’m sure that in the next two or three years, the buying public will come to the view that these cars are not environmentally friendly because they will start to burn oil after just a small bit of electric power,” he said.

Dudenhoeffer disagreed with IHS Automotive’s predictions, which he said were really a total of the automakers production plans rather than a reflection of likely sales.

Tesla would soon be taking away the cream of the German premium manufacturers’ most profitable sales.

“In a lot of markets we are seeing Tesla doing better than the BMW 7-series, Mercedes S-class, Audi A8 and Porsche Panamera. Tesla can boast real innovation and customers with big money are trying it. I’m not sure if Tesla will be successful in the long term but when they broaden the line we will see if it can bring revolution to the car industry.”

Top end only threat?
Surely, this advantage can only be trained on the top end of the market, where Tesla’s big and very expensive batteries are viable?

“No. I think in the next 10 years Tesla will have medium and compact cars. We are seeing the next generation of batteries with the Nissan Leaf possibly getting 500 kilometres.”

Tesla’s Model X SUV is scheduled for launch this month. The smaller Model 3 will follow in 2017. Other models are expected.

In August Audi announced its new Q6 battery only-powered SUV. It will be launched in 2018, three years behind the Model X.

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One Response to Plug-ins Lose Out To Battery-Only Vehicles – Dudenhoeffer

  1. DaveT September 3, 2015 at 4:10 pm #

    The problem with the PHEVs that some of the OEMs are creating right now is that they have too short of all-electric-range (AER) so they don’t drive like true electric cars while costing a premium.
    The PHEV architecture is fine… it’s the particular implementations that may not be sufficiently compelling. PHEVs solve the 100 year old BEV range anxiety problem. Compelling PHEVs have an AER is long enough to allow the vast majority of driving as an EV, a modest price premium, and attractive styling/performance, and a powertrain design and battery that doesn’t scare potential buyers away from durability concerns.
    A great convenience with any electric vehicle is the ability to charge at home and avoid having to go to gas stations. So, the sooner these OEMs start creating compelling implementations with over 40 to 50 mile AERs and interesting performance, the sooner they will have some sales success.
    Tesla certainly has another formula for success… long range BEV sedans with outstanding performance, the ability to charge at home and avoid gas stations, a Supercharger DCFC network to allow intercity travel, attractive styling, relative reliability, and good sales and service experience. We have 3 Tesla Model S on our street alone and the no-haggle shopping, order on the internet, deliver the vehicle to your home, reliability, and service experience seem to be well received by my neighbors compared to their German luxury car experience.
    Short AER PHEVs and sub-100 mile BEVs are first generation experiments that are not likely to be mainstream sales successes. 40 to 75 mile AER PHEVs and 200-300 mile range BEVs will likely find considerably better sales success.

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