Mercedes unveils Tesla rival

By Russ Mitchell

Los Angeles Times

SAN FRANCISCO — With everything else bearing down on Elon Musk and Tesla Inc. — a production mess, cash crunch and Twitter-induced drama — you can add looming competition in the luxury e-car market.

Mercedes-Benz on Tuesday unveiled the EQC, its first entry into the all-electric luxury vehicle market. It joins Jaguar’s new I-Pace all-electric SUV, due in U.S. showrooms this fall. Audi and Porsche will begin selling all-electrics in 2019.

Rising competition was one reason Goldman Sachs stock analyst David Tamberrino downgraded Tesla’s stock Tuesday morning; the other is the pending end of tax credits on its vehicles.

In a note to investors, Tamberrino put a “sell” rating on Tesla stock with a target price of $210 a share — 30 percent below Friday’s closing price of $301.66.

At the close of trading Tuesday, Tesla stock was down 4 percent to $288.95.

Goldman had a sell rating on Tesla stock in August before the firm switched to a “not rated” label when it was hired to advise Tesla on a short-lived plan to take the company private.

Tamberrino focused on the looming end of federal tax subsidies for buyers of Tesla vehicles, along with increasing competition. “Tesla is losing the U.S. tax credit ahead of competition, posing further challenges to affordability at a time when competition is intensifying,” he said.

Tesla has benefited from a $7,500 customer tax credit on its Model S, Model X and Model 3 cars, which range in price from $50,000 to well over $100,000, depending on options. The tax-credit program begins to run out after a manufacturer sells 200,000 cars in the United States, which Tesla has surpassed. The credit amount will drop to $3,750 in January 2019 and to $1,875 in July, then will disappear in January 2020.

The Mercedes-Benz EQC, shown in Stockholm, is due to hit U.S. showrooms in 2020 and would qualify for the full $7,500 credit if the program remains intact.

The company didn’t reveal the price tag, but said the car will have a range of 200 miles — well below that of most Tesla vehicles — with an 80-kWh battery and a motor on each axle capable of 402 horsepower.

The car is the first in a line of all-electric Mercedes passenger vehicles. Chief Executive Dieter Zetsche said the company is investing about $12 billion on an expanding EQ line.

Two more Tesla competitors will be unveiled soon, both in San Francisco. On Sept. 11, BMW will reveal the iNext, which aims to take on Tesla’s Model 3. BMW has offered little detail on the car so far. BMW also plans to export an all-electric SUV from China, the iX3, under a joint venture with China’s Brilliance Auto.

More is known about the Audi E-tron, a high-end all-electric SUV already in production and set for U.S. showrooms sometime in 2019. Its range has not been announced, but its 95-kWh battery puts it in the 250-mile zone.

Porsche has already announced its all-electric sports car, the Taycan, which will be available in the U.S. sometime next year. Horsepower is expected to exceed 600.

More lower-priced vehicles are expected soon, including a higher-range version of the Nissan Leaf and an all-electric version of the Hyundai Kona compact SUV, expected to go on sale this fall.

Dozens of other all-electric models are in the works.

“In a couple years, there will be competition up and down (Tesla’s) model line from brands with serious weight,” said Akshay Anand, an analyst at Kelley Blue Book. “Ultimately, Tesla has maybe a year or two to knock it out of the park.”

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