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Tesla Motors, Inc (NASDAQ:TSLA) Will Face Audi in Model X Challenge

Tesla Motors Inc Model-X

Tesla Motors hasn’t seen an end to the rivalry coming up in the EV space as another one appears in Germany. Fortune reports that Audi is already teaming up LG Chen and Samsung SDI to create an all-electric SUV. Audi’s foray into the EV market might divvy up the EV market share even as Tesla struggles with weak vehicle delivery numbers.

Tesla Motors Inc Model-X

Audi and other European carmakers such as BMW and Mercedes Benz have been building plug-in hybrid vehicles to comply with emissions statutes in Europe. Now, Audi is going the pure-EV route as plans to debut an SUV with a range above 310 miles unfold. D. Bernd Martens, a board member for procurement at Audi says, “together with our South Korean development partners, we are bringing production of the latest battery‑cell technology to the EU and strengthening European industry with this key technology.”

Direct competition to Tesla’s Model X

An EV SUV with a 310-mile range is a direct rival to Tesla’s Model X. Ulrich Hackenberg, Audi’s R&D chief says, “We will optimally integrate the innovative cell modules developed with LG Chem and Samsung SDI into our vehicle architecture.”

Audi already has e-Tron family and the 2016 A3 e-tron plug-in hybrid is the first to go into production. Experts expect Audi to unveil a Audi Q6 coupe at the Frankfurt Motor Show next month and there’s the chance that the firm will hint at its EV project then. Earlier in May, Audi has confirmed that it will launch a “sporty SUV with electric drive” that will arrive sometime in 2018.

The fact that the EV SUV is reportedly being made by Audi adds fuel to the speculation that it would be a luxury EV targeted for North American sales. Audi is the premium brand for Volkswagen cars and the firm has been in the business of making luxury cars long enough to know what will be a hit in the market.

Tesla now has to fight off the sharks

Tesla has largely ignored any rivalry posted by U.S. carmakers in the EV space because U.S. carmakers were mostly doing half-hearted attempts to phase out ICEs. In addition, the firm had to watch out for three weird rivals who are keen to battle Tesla in the EV space. However, those weird rivals were not much of a problem because they are just starting out and Tesla could always find a way to shut them up before they grow out of hand.

However, with the Audi rivalry, Tesla cannot do much than find a way to produce more cars to meet the demand. Audi is a global brand, they have deep pockets and they have the facility to build cars faster than Tesla can imagine. Tesla still has money issues, it has slashed the delivery numbers for its cars and investors are currently angry at the stock.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.