Tesla is awesome, but there is competition coming and not from where you think
Full disclosure to start this: I am a big fan of Elon Musk and Tesla. I think they are an extremely innovative company and are going to be around for a long time. They have built up a lot of momentum recently and are not showing any signs of slowing down (see their upcoming Battery Day announcement coming on September 22nd). They have some weaknesses for sure: fit and finish, paint quality, strange omission of some features (like a powered trunk on the 3), charging network still needs more stations (they aren’t rolling out their super charger stations quickly enough – Marquette MI for example has given approval and is still waiting but has not heard a word about this for 6 months or more), the bar in the trunk area of the 3 which keeps you from putting very large items into the car, and a few more. However, they have a lot of strengths as well: range, super fast charging coming soon in the v3 of the Super Charger stations, 0-60 times, fun to drive, super clean and space age interior, unpublished improvements over time and even from car build to car build, always on internet, full auto pilot feature (currently in Stage II and hopefully moving to Stage III soon), speed of innovation and flexibility, battery tech, advanced software and more. They are clearly the EV company to beat right now. That being said, there are some intriguing competitors out there that are coming at Tesla hard and fast. That is what I wanted to talk about today.
The biggest competitor for Tesla in the car and SUV slice of the EV market right now is Lucid. I admit that I hadn’t even heard of them until today. However, I am impressed. No, they don’t have a car mass produced at this point. They have prototypes and they are getting their factory online in Casa Grande, Arizona (you can read more HERE). The factory should start producing cars in 2021, and you can currently reserve a car on their website. Their flagship model is a super luxury car called Air. It is in the $100k plus range for price for the top of the line cars. Lucid claims that it is not a direct competitor to the Tesla Model S because it is a true luxury car. They claim that the Model S is a Premium car – not a true luxury car. Three things stand out immediately about the Lucid Air: range (they show 400 miles on their website but claim over 500 miles in other news articles and interviews with Lucid CEO Peter Rawlinson – a former Tesla executive), charging speed (up to 20 miles per minute!) and striking looks (which have a purpose as well – they produce a drag coefficient of only 0.21g which is the best in the industry). Lucid is an energy company as well – much like Tesla. They are definitely a formidable competitor. Rawlinson was one the chief designers and creative talents behind the Tesla Model S. He is purportedly a stickler for details and a perfectionist when it comes to car design. The Lucid Air is striking and formidable for sure. It has self driving capability including extremely capable and fast lidar sensors. Tesla relies more heavily on other types of sensors and cameras for its full autopilot mode of autonomous control. The Lucid Air is currently behind Tesla in autonomous driving capabilities. Lucid says it will offer lower priced models as well with the lowest one starting at $60,000 (maybe). No pricing has been confirmed at this point.
Digging deeper into Lucid’s plans, we see that they are in fact releasing several trim levels with the high end car (luxury car) topping out in the low 6 figure range. They will start at $60,000 and work up from there. There is no clear layout at the moment of what features you will get on the base car vs. the top end car. It is not clear if the base car will have the long range or if that will only be available on the top end car. Stay tuned for more details.
Another competitor for Tesla is the Volvo Polestar. Full disclosure again: I am half Swedish, so I like the yellow brake calipers and the yellow seatbelts. I think they are cool. However, the car has some serious deficiencies which make it only a marginal competitor for Tesla. The Polestar 2 starts at $59,900. The Polestar 1 is their high end EV at over $150,000. The huge red flag right away on the Polestar 2 is that its range is only 275 miles. That is not enough to make it a serious Tesla or Lucid competitor. That seems like tired old battery and software tech and is frankly extremely disappointing because it is a beautiful car. With a 0-60 in less than 5 seconds, it does not wow. Granted the Tesla 3 goes 0-60 in 4.4 seconds (extended range) or even 3.2 (performance), but Polestar is still not in the wow range. The car includes Pilot and Pilot+ packages which appear to be the Polestar names for Auto Pilot and Full Self Driving (Telsa) respectively. You pay extra for any paint that isn’t black. That is the opposite of a Tesla which has standard white paint. If you want the cool yellow brake calipers, you will have to upgrade the car to the performance model. Black interior is standard with two other options including a beautiful tan leather option. Overall, this looks like a very solid car and is being produced already. I think you have to put this in a tier below the Lucid and Tesla offerings because it just doesn’t seem to offer enough and its tech seems to be at least 10 years behind Tesla and Lucid.
In summary, I think the Lucid cars are going to push Telsa hard. Tesla will have to keep innovating and will have to adjust as more companies (like the Big 3 even) try to grab some of their best people. They will have to continue to hire exceptional engineers and maintain their innovative culture. Obviously if something happens to Elon Musk, stuff will go down the tubes. He is the driving force behind their culture and their innovation. If Musk stays and is in good health, the sky is the limit for Tesla. – Erik