Often entire markets turn from little mistakes and the risks a challenger takes can often flip an entire market. When Appel launched the iPod, iPhone, and iPad there were existing MP3, Smartphone, and Tablet markets but by taking a risk and doing something highly differentiable Apple took markets from much deeper entrenched and better funded firms. Hyundai has been surprising the car market with cars that compete effectively with cars costing far more from vendors like Mercedes Benz and Lexus for some time. They build a high quality luxury line at a far lower cost than the traditional competitors.
Well apparently they are about to take the battle to Tesla and right at a time when Porsche is expected to enter this segment as well.
Let’s talk about how Hyundai could take over the electric car market with the Ioniq. It’s a matter of choice.
The Problem With Tesla
Tesla currently owns this segment but while they are strong in the Silicon Valley with penetration that rivals Toyota they have had issues selling in the rest of the world. In the US this is largely because they came to market with a company store model and didn’t realize that a huge number of influential politicians own car dealerships and would block them. So their ability to sell in parts of the US is severely limited. In addition the charging infrastructure in most of the country still sucks and while Tesla has done an impressive job rolling out Super Chargers they are still rare and often, where they are located, Tesla drivers have to wait in line to get access to them.
Finally Tesla has a selection of two car designs in market a huge sedan and a huge SUV. Both require an impressive amount of parking space and while they are as close to a no-compromise electric solution as you are likely to see from anyone not everyone wants either a huge sedan or SUV particularly if you can’t use the SUV as a truck (the seats don’t yet fold flat).
Porsche Mission E
While the Tesla is certainly good looking the Porsche Mission E looks more like a true exotic car. It charges faster, should have similar in-line performance to Tesla’s sedan both in terms of acceleration and range, and it should handle better because that’s Porsche’s forte. Often referred to as a “Tesla Killer” because it will carry more status due to the brand and design of the car; and for an audience that is very status focused this car is basically rolling art. This car will likely also compete well with the coming Aston Martin Rapide E electric. But while it sells through a dealership network going around the dealer fight Tesla is having they still have to deal with the crappy electric car charging eco system.
The Hyundai Ioniq is the only car that directly addresses the electric charging eco-system problem. It has a nice design more similar to the Tesla and what will likely be a far lower price. But the kicker is flexible power train options.
For folks that just want to have better gas mileage and get familiar with electric technology they have a gas/electric hybrid configuration. For those that can live on electric most of the time for short runs but where the public charging capability is limited or where they may want to drive distance and not sweat chargers they have an electric/gas plug in configuration. And for those few who think they can really live on electricity alone they have a full electric configuration. Same cool design, more line, based on the tease, to Tesla than Apple, and a dealership network like Porsche, more aggressive pricing, and a choice that allows you to match the drivetrain to your unique needs. These choices plus an expected far more affordable price should allow Hyundai to outsell both Tesla and Porsche and end up with the higher volume luxury car in the segment. Granted Porsche has other cars that are hybrids and they have what appears to both be the better looking and more excusive offering.
Wrapping Up: Telsa’s Mistakes
There are two mistakes that Tesla seems to have made. One to go to war with the folks that own dealerships (Musk admitted he was unaware of this when he launched Tesla) and the other is not at least providing a good alternative for folks who just aren’t comfortable living exclusively on chargers. In the end, regardless of the technology, a car company needs to sell cars and have loyal recurring customers but can’t get there if most can’t or don’t feel comfortable buying the cars. Of the three vendors likely in market by 2017 with a full electric car, Hyundai has the best strategy for maximum market share. Porsche can certainly weather this competition because they have a broad line of cars, Tesla likely not so much.