Tesla seen emerging as winner in US e-car race

Bloomberg

More than a dozen automakers are jostling to lead the US electric-car race, but Bloomberg New Energy Finance sees a clear winner separating from the pack: Tesla Inc.
The automaker led by Chief Executive Officer Elon Musk will emerge as “the stand-out” in total cumulative deliveries through 2021, reaching almost 709,000 vehicles, according to BNEF’s Long-Term Electric Vehicle Outlook. Tesla is projected to pull away from current leader General Motors Co., which may slip behind Volkswagen AG’s aggregate sales of plug-in hybrid and fully electric autos in four years’ time.
Getting there won’t be easy or a straight shot: Tesla shares have declined every day this week, wiping out some $9 billion in market value, on signs that Model S and Model X deliveries have plateaued just ahead of this month’s introduction of Musk’s more-affordable Model 3 sedan. What the report captures, however, is the longer view: that Tesla will be able to distance itself from established automakers and dominate many of the world’s biggest markets for battery-powered vehicles.
“If they can stick to the Model 3 timeline, they’re going to be at the front edge of this for a while,” BNEF analyst Colin McKerracher said of Tesla in a phone interview.
Executing a smooth introduction of the Model 3 as demand for the Model S sedan and Model X sport utility vehicle flatline has sapped from Tesla’s stock surge this year. The shares fell as much as 5.3 percent after a 7.5 percent plunge, the steepest one-day drop in more than a year. The drubbing has dropped Tesla’s market capitalization back below GM for the first time in more than six weeks.
While BNEF expects Tesla, VW and GM will lead the EV charge in 2021, the research group owned by Bloomberg LP predicts at least three other automakers will have also surpassed the 200,000 cumulative sales mark in the US by that year. After crossing that threshold, buyers are no longer eligible for the full federal $7,500 tax credit toward purchases of vehicles from those manufacturers.
Hitting the 200,000 unit milestone would portend more sustainable demand for electric vehicles. Though BNEF does expect some impact from the federal tax credit phase-out, industry sales could be even higher because the analysts’ short-term forecasts are based only on electrified models disclosed to date.
Product introduction schedules for 2020 and 2021 are still taking shape. BNEF made its forecasts before Volvo said it’ll have five electric models in its lineup by 2021 and that all of its new models will have hybrid or fully electric powertrains from 2019. “Tesla will face intense competition by next decade from legacy OEMs who are expanding their electric options,” Brian Johnson, an analyst at Barclays Plc, wrote in a note to clients. “We’ve long argued that Tesla as an EV company is not truly disruptive, in that legacy OEMs will eventually wake up and offer fully electric vehicles by the early 2020s.”
The prediction BNEF settled on that Volkswagen could climb to the No. 2 spot by 2021 was the “the most contentious” of the research group’s projections, McKerracher said. The German automaker doesn’t yet have the same presence in the US market as other electric-focused automakers, though the opportunity is there for the company to rank among the leaders based on all the vehicle launches it’s announced.

HYBRID OUTLOOK
The expected rise in pure electric vehicle demand in the US will come at the expense of some hybrid vehicle demand, BNEF said. This could pose a challenge for the likes of Toyota Motor Corp., known for gasoline-electric cars like the Prius. The company sold about 1.4 million traditional and plug-in hybrid vehicles last year and has delivered more than 10 million cumulatively since the first Prius debuted in 1997.
Battery electric cars have already surpassed plug-in electric hybrids in the US, with about 85,000 and 73,000 sold last year respectively, BNEF data show. The trend also holds globally, with 412,000 battery electric vehicles sold last year to 283,000 plug-in hybrids.