When will Tesla Motors' (NASDAQ:TSLA) first serious rival show up? The Silicon Valley automaker's stunning all-electric Model S sedan has won a host of awards and accolades -- and is racking up strong sales.
That should have rivals in Tesla's price range worried. But while we've seen some of the global automakers make bolder moves toward hybrids, no head-on competitor for the Model S has yet emerged. What's the deal?
Tesla is gearing up for another big leap
Tesla itself is focused on its next new products -- the upcoming Model X SUV due next spring, and the more affordable Model III that is expected in a few years. If the booming global market for luxury crossover SUVs is any indication, the Model X is likely to expand Tesla's sales significantly.
Members of the Tesla Motors Club estimate that the company already has about 20,000 "reservations" -- Tesla's term for pre-orders -- for the Model X. History suggests that those reservations will convert to sold orders at a high rate. Given that Tesla says that a Model X reserved today will ship in fall 2015, a total of well over 20,000 Model X deliveries next year seems likely.
That would seem like enough to worry the likes of BMW (NASDAQOTH:BAMXF) and Volkswagen Group (NASDAQOTH:VWAGY), both of which have been reaping substantial profits from luxury crossover SUVs, and their key rivals. But so far, with one or two possible exceptions, the big luxury brands don't seem to be interested in following Tesla's lead with their own premium battery-electric vehicles.
All of the big luxury contenders are doing something. But what?
BMW has made some intriguing moves into higher-tech "green" products, but it's not following Tesla's model. Instead, BMW is building advanced hybrids that leverage its emerging advantage in carbon-fiber construction technology.
The i3, a mass-market compact electric car with a gasoline "range extender," and the i8, a plug-in hybrid sports car, are technically interesting, advanced products that should find buyers -- but they're unlikely to dent Tesla's order flow.
Meanwhile, BMW rival Mercedes-Benz has loaded its latest models with plenty of advanced technology, including a limited self-driving system. But its electric-car ambitions don't seem to include a direct Model S competitor... at least not yet.
While Mercedes' parent Daimler (NASDAQOTH:DDAIF) was an early investor in Tesla, and the two have partnered on electric power trains for small Mercedes models, Mercedes doesn't appear to be moving into the premium electric-car space anytime soon. Instead, it's rolling out a range of plug-in hybrid versions of its existing models, starting with a new plug-in version of its big S-Class sedan.
Volkswagen's Audi and Porsche brands are also offering some hybrids, and Audi recently launched a battery-powered version of its small A3. Reuters has reported that Audi has plans for a range of premium electric vehicles on its drawing board -- including a new Q8 SUV that would be aimed directly at the Model X, but it's unclear when, or even whether, those vehicles will be produced.
Nissan's (NASDAQOTH:NSANY) Infiniti brand is mounting an aggressive global expansion, and an electric car could be part of that plan. Nissan's Leaf is so far the most successful pure EV from a major automaker, and the company has shown an all-electric Infiniti sedan that was said to be headed for production.
But that program was delayed last year amid speculation that Nissan was reworking its new Infiniti to be more competitive with Tesla. Right now, it's unclear when (or if) it will come to market.
Toyota (NYSE:TM) is also a Tesla investor, and its Lexus brand offers a range of hybrids. But Toyota's management has soured on the idea of electric cars powered by batteries, investing in hydrogen fuel cells instead. That decision sparked some choice words from Tesla CEO Elon Musk, but Toyota appears set on a hydrogen-powered course.
Its first fuel-cell car, the Toyota Mirai, is expected to come to market next year. But a fuel-cell Lexus is at least a few years away and, right now, it's (very) unclear whether the technology will catch on in the U.S.
Finally, there's Cadillac. General Motors' (NYSE:GM) luxury brand has GM's long history with electric cars to tap, and this humble Fool has speculated that a plug-in hybrid version of the upcoming new full-size Cadillac sedan is likely in the works.
But there may be more to Cadillac's electric-car story. Former GM CEO Dan Akerson promised that GM would challenge Tesla with an all-electric Cadillac -- something more formidable than the Chevy Volt-based ELR it's offering now.
It's possible that the new vehicle architecture -- which carries the internal code name "Omega" -- that GM is developing for its upcoming big Cadillacs will be adaptable to a pure battery-electric design. We'll know more when GM unveils its new sedan next spring.
The upshot: Tesla competitors could be coming, but not right away
A big objection to battery-electric technology for cars continues to be the size, weight, and cost of the batteries required to give good range. Tesla solved that problem by designing a big luxury sedan around its battery pack -- giving it a product that could be profitably priced.
But other automakers seem to be waiting for advances in battery technology that haven't yet arrived. Tesla's partnership with battery-maker Panasonic and its upcoming Nevada "Gigafactory" are expected to yield less-expensive batteries, if not necessarily lighter ones.
It's possible that one or more of the global automakers will be among the Tesla Gigafactory's early customers. It's also possible that one or more of the big automakers is setting up its own high-volume source of batteries in secret.
It's also possible -- maybe even likely -- that we'll learn a lot more during the next few months. The big automakers tend to save their most newsworthy product announcements for the major auto shows, which run from October into the spring. A new Audi, or Nissan, or Cadillac EV could well be waiting to be unveiled on a show stand this winter.
What isn't likely is that none of the global automakers will challenge Tesla as it grows. But although we've heard some tantalizing hints -- and although Tesla sales continue to climb -- it's still not clear where the first head-on Tesla competitor will come from, or when it will arrive.
John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends BMW, Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.