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10 Electric Cars the Tesla Inc (TSLA) Model 3 Needs to Beat

The Tesla Model 3 is not the only electric car in town

By Brad Moon, InvestorPlace Contributor

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Model 3

Source: Tesla

Tesla Inc (NASDAQ:TSLA) finally held the big event to celebrate the launch of its latest — and most important to date — new vehicle release: the Tesla Model 3.

10 Electric Cars the Tesla Inc (TSLA) Model 3 Needs to Beat
Source: Tesla

Other Tesla vehicles have been important in their own way. The Roadster was its first electric car, a critical milestone in the company’s history. The Model S has been its bread and butter, proving that the upstart automaker can produce premium cars in quantity. The Model X was its entry into the popular crossover SUV market.

But the $35,000 Tesla Model 3 with a 220 mile range is the release that will make or break the company. The Model 3 is aimed at the mass market. It will test Tesla’s capacity to produce vehicles like never before. And if all goes well, the Model 3 won’t just drive TSLA stock to new levels, it could kick-start wide scale consumer adoption of electric cars.

In order to be the hit TSLA is counting on, the Tesla Model 3 has a few competitors to knock off.

Electric Cars the Tesla Model 3 Needs to Beat: Faraday Future FF91

Electric Cars the Tesla Model 3 Needs to Beat: Faraday Future FF91
Source: Faraday Future

This one should be easy.

Faraday Future is the other big electric car startup, but unlike TSLA, Faraday Future doesn’t actually have any cars in production.

A working prototype of the FF91 was shown off at CES 2017 in January, but it wasn’t really ready for prime time. Tesla just has to convince electric car lovers to skip the $5k FF91 deposit and instead buy an actual working Model 3 and it should be able to put this one in its rear view mirror.

Electric Cars the Tesla Model 3 Needs to Beat: Nissan Leaf

Electric Cars the Tesla Model 3 Needs to Beat: Nissan Leaf
Source: Nissan

Nissan Motor Co Ltd (ADR) (OTCMKTS:NSANY) released the Leaf electric car in the U.S. in 2010.

Since then, sales of the 5-door hatchback had been respectable — at least for an electric car. Last November, it hit the 100,000 unit mark for the U.S., reaching 239,000 units globally.

With a starting price of $30,680 the Nissan Leaf is considerably less expensive than the Tesla Model 3, but it’s also far more bare bones. Its current range is only 107 miles, although a 200 mile battery pack is expected to be available sometime this year.

Electric Cars the Tesla Model 3 Needs to Beat: Ford Fusion Energi Plug-in Hybrid

Electric Cars the Tesla Model 3 Needs to Beat: Ford Fusion Energi Plug-in Hybrid
Source: Ford

Ford Motor Company (NYSE:F) represents the old-school auto makers that Tesla is trying to beat.

Ford may be rooted in the past and heavily reliant on gas guzzling pickup trucks, but it’s also making an effort to sell electric cars.

The Ford Fusion Energi Plug-in Hybrid starts at $31,120. It’s not a pure electric car, and that will give the Model 3 an advantage for those who want nothing to do with gasoline, but gives Ford the edge up for consumers with range anxiety. The Plug-in hybrid has a 21 mile range in purely electric mode, but can go 610 miles with a full tank of gas factored into the equation.

If you want nothing but battery power, the company will happily sell you a Focus Electric with 115 miles range for $29,120.

Electric Cars the Tesla Model 3 Needs to Beat: Toyota Prius Prime

Electric Cars the Tesla Model 3 Needs to Beat: Toyota Prius Prime
Source: Toyota

Toyota Motor Company (ADR) (NYSE:TM) arguably kicked off the hybrid car market with the Prius. The company has sold over 6 million of them since 1997.

The Japanese automaker doesn’t yet offer a pure electric car to compete against the Model 3. However, it does offer a plug-in hybrid in the Prius Prime.

With the reputation of Toyota, a pure electric range of 25 miles and a $27,100 starting price (minus up to $4,500 in Federal tax credits, which Prius Prime buyers are still eligible for despite the small gas engine) and a 640 mile range using its hybrid drive, the Prius Prime is going to be tough to beat.

Electric Cars the Tesla Model 3 Needs to Beat: Smart Fortwo Electric Drive

Electric Cars the Tesla Model 3 Needs to Beat: Smart Fortwo Electric Drive
Source: Daimler AG

Daimler AG (ADR)’s (OTCMKTS:DDAIY) Smart Fortwo Electric Drive is especially appealing to young, urban drivers.

The two-seater is totally unsuitable for families, and its 80 mile range is too low for most highway travel. Those demographics are TSLA’s to take with the Model 3.

But within an urban environment? The tiny car offers easy parking (including in unconventional spaces), it comes in funky two-tone paint jobs and offers a convertible option. It can fully charge in under three hours and features an affordable $24,550 starting sticker price.

Electric Cars the Tesla Model 3 Needs to Beat: VW eGolf

Electric Cars the Tesla Model 3 Needs to Beat: VW eGolf
Source: Volkswagen

Volkswagen AG (ADR) (OTCMKTS:VLKAY) is releasing an all new version of its eGolf for 2017 and this one could pose some serious competition for the Tesla Model 3, although like the Smart Fortwo the eGolf’s appeal is primarily for urban dwellers.

The Volkswagen eGolf is a roomy 5-door hatchback with the promise of premium fit, finish and drive. It can’t compare to the Model 3’s range, although the 2017 version boosts eGolf range to 125 miles between charges. Volkswagen will offer advanced safety features, including forward collision warning with autonomous braking.

The previous version started at $28,995 and the 2017 eGolf is likely to be priced slightly higher.

Electric Cars the Tesla Model 3 Needs to Beat: Chevrolet Bolt EV

Source: General Motors

General Motors Company (NYSE:GM) makes what is expected to be the primary competition to the Model 3 when it comes to mass adoption: The Chevrolet Bolt EV.

In the race to deliver a mass market plug-in EV, Chevy beat TSLA with the Bolt, which launched in December and it has been rolling out nationally since then.

At a starting price of $37,495 and a range of 238 miles, the Chevy Bolt costs a little more than the Model 3 and it has a slightly longer range. But the Tesla is sportier and more luxurious. Well-heeled buyers can shell out extra for the $44,000 extended range Model 3 that will be able to cruise for 310 miles between charges.

The Bolt won a collection of “best of” awards for 2017, including Green Car of the Year and it has a head start on Model 3 sales, so this should develop into an interesting battle.

Electric Cars the Tesla Model 3 Needs to Beat: Chevrolet Volt

Electric Cars the Tesla Model 3 Needs to Beat: Chevrolet Volt
Source: General Motors

General Motors also has a strong horse in the race when it comes to plug-in hybrids, in the Chevrolet Volt.

Starting at $34,095 it costs less than both the Tesla 3 and Chevy’s own Bolt electric car. But this plug-in hybrid has a large enough battery to qualify for a sizeable federal tax credit (bringing that starting price down to $26,595) and to power the Volt for 53 miles purely on electrical power.

Add the gas engine in with a full tank and range anxiety is gone with 420 miles between fill-ups or charges.

Electric Cars the Tesla Model 3 Needs to Beat: BMW i3

Electric Cars the Tesla Model 3 Needs to Beat: BMW i3
Source: BMW

The fourth best-selling electric car in the U.S. last year (after the Tesla Model S, Tesla Model and Nissan leaf) was the BMW i3.

This one is better equipped than most to take on the Tesla Model 3 head-to-head because BMW — like Telsa — puts an emphasis on sportiness, technology and luxury in its cars.

However, the Model 3 is going to have a considerable advantage in both range and price. The $42,400 BMW i3 gets 114 miles on a charge. An extended range model that takes it to 180 miles between charges (still less than the standard Tesla Model 3) starts at $48,300.

Electric Cars the Tesla Model 3 Needs to Beat: Tesla Model S

Source: Tesla

Finally, TSLA will be competing against itself.

The Tesla Model 3 will be vying to convince potential buyers that it lives up to the high standards set by the Model S.

At the same time, the much less expensive (and lower margin) Model 3 is likely to siphon sales that may have otherwise gone to the Model S. The Model 3 will have to not only sell well against electric cars from other manufacturers, it will also have to move enough units to make up for any cannibalized Model S sales.

With production expected ramp up to 20,000 Model 3s per month in December, it shouldn’t be long before we find out if Tesla has found the formula for mainstream electric car success.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/08/10-electric-cars-the-tesla-inc-tsla-model-3-needs-to-beat/.

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