Tesla gets nod to deliver Model 3 in Europe

Posted by MarketsandMarkets on Jan 25, 2019 3:54:19 PM
MarketsandMarkets

Tesla Motors has announced that it would begin the deliveries of its long-awaited Model 3 Long Range Battery variant in Europe from February 2019. Tesla Model 3 car was initially launched in the US in July 2017. According to Tesla, “Model 3 is the best-selling car in the US in terms of revenue and the 5th best-selling car in terms of volume”. The Model 3 Long-range version delivers 338 miles under the latest Worldwide Harmonised Light Vehicle Test Procedure (WLTP) and goes from 0–62mph in 4.8 seconds. In Europe, Tesla Model 3 will be sold with a Combined Charging System (CCS) charging port, which would help access thousands of third-party fast charging stations across the region. The company has recently seen sales volumes comparable to more established players such as the German trio of Audi, BMW, and Mercedes, despite its much narrower product range.

Need for high voltage battery in electric vehicle industry

A few years back, the average battery capacity of the battery electric passenger car was 24 kWh–30 kWh. However, the entry of Tesla S and Tesla X has raised the capacity of a BEV to 75 kWh–100 kWh. Tesla Model 3 long range variant is equipped with a 75 kWh battery pack, which is higher than the industry average of around 30 kWh. According to MarketsandMarkets™, an electric vehicle battery with capacity ≥75 kWh is considered a high voltage battery.

Factors such as the increasing stringency of vehicle emission control regulations, growing environmental concerns, volatile oil prices, and increasing consumer awareness about electric vehicles have caused a paradigm shift in the automobile industry. The implementation of vehicle emission regulations has compelled OEMs to develop alternative fuel technologies such as battery electric vehicles (BEVs). However, the batteries of current electric vehicles have low capacities with long charging durations and limited distances covered per charge, which creates ‘range anxiety’. This has increased the demand for high capacity batteries to increase the driving range. OEMs have acknowledged this barrier of ‘range anxiety’ and have started focusing on increasing the size of the battery pack, which can improve the driving range. For instance, Tesla plans to introduce the new Roadster in 2020, which promises 620 miles driving range. Additionally, with an improved economic status, consumer focus has shifted toward improved acceleration and longer driving range, which accentuates the need for high capacity batteries.

MarketsandMarkets™ View Point:

According to Chetan Borase - Research Analyst : Automotive & Transportation at MarketsandMarkets™, Tesla is a pioneer in the electric vehicle market. The company was founded in 2003 and is headquartered in California, US. Tesla Roadster was the first EV launched by the company in 2008. It was followed by the model S and many others. Currently, Tesla Model X and Tesla Model S are the highest selling high voltage electric cars in Europe.  With the entry of Model 3 long range version in Europe, Tesla will continue to hold a strong position in the high voltage battery industry. According to Tesla, Model 3 is a smaller, more affordable car. Hence, it is expected to give tough competition to the European OEMs. Factors such as stringent emission norms, rising demand for improved acceleration and longer driving range, and rapid development of charging stations are driving the growth of high voltage battery market. According to MarketsandMarkets™ analysis, the Asia Oceania region is expected to dominate the high voltage battery market (for passenger cars, trucks, and buses) during the forecast period, followed by North America and Europe. However, the high voltage battery market for passenger cars in North America leads the market with 64% of the total market share. The ecosystem of the high voltage battery market consists of manufacturers such as Tesla, BYD, Panasonic, LG Chem, Continental, Siemens, and others.

High Voltage Battery Market
Company-wise developments towards high voltage battery

Leading electric vehicle and battery manufacturers have made a breakthrough in the development of high voltage battery technology. For instance, Panasonic is working with Tesla to produce high voltage battery packs for model 3. In August 2018, China’s largest lithium battery maker, ATL, planned to begin the production of next-generation nickel-rich batteries in 2019. Additionally, OEMs such as Daimler, Tesla, and BYD are constantly developing various types of commercial electric vehicles including buses and trucks to meet the increased customer demand.

High Voltage Battery Company Wise DevelopmentConclusion:

Tesla is a promising player in the electric vehicle market. Being a first mover, the company focuses on in-house production of high voltage battery packs to accelerate the growth in the high voltage battery market. With the entry of Model 3 in Europe, Tesla would compete with European electric car manufacturers such as Audi, BMW, and Mercedes to launch technologically advanced high voltage BEVs. According to a recent poll by the German automotive publication, Autobild, 66% of Germans responded positively to consider a Tesla Model 3 while purchasing an electric car. Additionally, Tesla Model 3 received good response in the UK and Sweden. With the growing acceptance of high voltage BEVs in the region, the European high voltage battery market is expected to witness considerable growth in the near future. Tesla can also launch the Tesla Semi Truck in Europe to increase its share in the high voltage battery market for commercial vehicles.

Topics: Automotive and Transportation, tesla, high voltage battery market

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