Abu Dhabi, UAEWednesday 23 October 2019

Tesla Model 3 gets green light in Europe

US electric-car maker wins permission to market its top seller on the home turf of Audi, BMW and Mercedes-Benz

The Tesla Model 3 can now be sold in Europe. AP
The Tesla Model 3 can now be sold in Europe. AP

Tesla received permission to start selling its Model 3 in Europe, clearing the final hurdle in bringing the electric-car maker’s top seller to the home turf of Audi, BMW and Mercedes-Benz.

Deliveries should start in February for the Long Range Battery version of the midsize saloon - the same variant first sold in the US - according to Tesla, after Dutch vehicle authority RDW issued the OK.

The European launch is crucial for Tesla as it navigates what chief executive Elon Musk called a “very difficult” road ahead. The company is cutting jobs so it can profitably deliver lower-priced versions of the Model 3, Tesla’s first car targeted for the mass market. Mr Musk has pointed to sales of the saloon in Europe and China as a main reason he isn’t concerned about any potential setback caused by a halving of the US federal tax credit, to $3,750, on Tesla purchases as of January 1.

With the Model 3, Tesla also has an opportunity to broaden its attack on the premium car market dominated by Germany’s BMW, Daimler-owned Mercedes-Benz and Volkswagen’s Audi, according to Bloomberg. Tesla, based in Palo Alto, California, said in its third-quarter shareholder letter that “the mid-sized premium sedan market in Europe is more than twice as big as the same segment in the US”.

The Model 3 became the top-selling luxury car there last year, outstripping the Audi Q5, BMW 3 Series and other well-known models. Analysts and industry executives, however, have observed that competition with Tesla cuts across traditional categories.

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“Teslas are stealing customers away from vehicles that you might not expect,” EvercoreISI analyst Arndt Ellinghorst said in a report last week, after Toyota’s North American chief, Jim Lentz, discussed the impact of the Model 3 on the Prius, a hybrid that’s not marketed to luxury buyers. The Toyota executive said Tesla has created a new segment of so-called technology-driven products.

Toyota and Panasonic Corp are set to launch a joint venture next year to produce batteries for electric vehicles (EV) in an effort to compete with Chinese rivals, a source familiar told Reuters.

The joint venture, to be owned 51 per cent by Toyota and the rest by Panasonic, could also provide batteries to Toyota's EV technology partners Mazda Corp and Subaru Corp, the source said on Sunday.

The source declined to be identified because the talks on the joint venture are private.

A joint venture would build on the agreement that the pair announced in late 2017 on joint development of batteries with higher energy density in a prismatic cell arrangement.

A Toyota spokesman said the two companies have been working on the battery partnership announced in 2017 and declined to comment further. Panasonic made the same comment in a statement.

The two companies may announce the joint venture plan as early as this week, according to the source.

Traditional car makers are fighting back with their own electrified models. Jaguar began delivering the I-Pace all-electric 4x4 last year, while Daimler unveiled its EQC electric crossover and Audi followed with the E-Tron.

Updated: January 21, 2019 03:01 PM

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