The sleek design and great profile of the long-awaited 2016 Tesla Model X definitely makes for a status symbol. The sleekness and sexiness of the new all-electric SUV, however, does not come very cheap.
The most basic model (stripped of all excesses) starts at $80,000 whereas the experts in the Electric Vehicle market opine that the future of EVs lies in cheaper and more mass market vehicles.
The electric car pioneer, Tesla, launched its Model X, the first crossover from its paddock, at a gala event at its headquarters in Fremont, California recently. The launch event showcased multiple SUVs swerving effortlessly across the stage showing off the Delorean-style doors and it’s amazingly profile, probably the first SUV to be called elegant and sleek!
Along with the leader, Tesla, other companies such as BMW and Mercedes Benz are torch bearers of the Electric Vehicle market as they bring out all-electric vehicles such as Mercedes Benz electric B and BMW i3 and of course the pioneer Tesla’s Model S. These EVs get envious glances from onlookers as they race across highways and the press is also giving them a lot of praise and encouragement.
But, car experts believe that the future of EVs lies not in the luxurious vehicles, but in the more modestly priced and mass market cars such as Ford Focus and Nissan Leaf whose starting prices are $29,200 and $29,000 respectively. The future lies in these kinds of affordable EVs that can target a larger cross section of the population rather than the sleek, luxurious yet very steeply priced Model X for which customers would need to shell out $130,000 for the top spec.
Currently, electric vehicles are more for the well-off customer and suited only for use in suburban and urban areas. Recharging is a huge challenge outside the suburbs, cities and the well-established and frequently travelled highways, such as California’s I-80 and/or I-5.
However, Kelley Blue Book, a guide for car pricing, said that the prices of EVs reduced by 9.7% in 2015 as against the prices of 2014, whereas the prices of automobiles in general went up 1.2%. Yet, EVs are not yet available for less than $20,000 whereas many fuel-efficient cars are available at sub-$20,000 levels. Investment in electric car technology requires that prices are at a higher range to enable reasonable profitability.
While EVs at sub-$20,000 levels are yet to be easily available in the market, experts observe that after dealer concessions and government subsidies, it is possible to lease an electric vehicle (like Chevrolet Spark) for as low as $139 per month. However, space continues to be a huge restraint for cheap EVs as many Americans desire more passenger and cargo space.
In this aspect, Tesla’s Model X is a huge winner as it has ample cargo and passenger space. Yet there is a huge potential for smaller vehicles, considering the fact the smart vehicles are flooding the markets in Boston, New York, Silicon Valley, San Francisco and Seattle and that EV prices are dropping slowly and steadily.
It is pertinent that owning an electric car is being viewed as a status symbol as advertisers are talking about ‘Tesla lifestyle’. Model X is a great opportunity for Tesla to grow its customer base, especially among women drivers who make up a huge percentage of crossover purchasers.
While marketing and advertising play equally crucial roles as designing and building cars, the economic aspect also is considerably important for making inroads in the market. Considering the high volatility of gasoline prices recently, wherein the prices dipped and surged randomly and backed by other factors such as geopolitical unrest and potential climatic changes in the future, electric cars are being viewed as a hedge in the future of automobile markets. While the offerings of green and high-tech factors are hugely attractive, EV prices have to be more realistic for improved growth potential as compared to the conventional gasoline-based vehicles.