Along with models like the 2019 Jaguar I-PACE, Audi e-tron, and upcoming Porsche Taycan, we're seeing a new generation of high-tech battery-powered vehicles that bring an exciting new direction to legacy automakers. These models also have something important in common: They aim to disrupt Tesla, the industry’s de-facto electric car leader.
Disruption is a word thrown about with abandon these days as veritable institutions of business and commerce fall from grace, or at least profitability, at the hands of an ever-changing and disruptive world. Think Sears, Borders, and Kodak. The list of major companies disrupted – either gone, a shadow of their former self, or on the ropes – continues to grow. While the auto industry has largely escaped this same fate, change is definitely in the wind. And its bogeyman in recent years has clearly been Tesla.
We’ve seen the auto industry disrupted before, not by innovators but rather by geo-politics, circumstance, and a lack of long-term vision. The Arab Oil Embargo of 1973 and the 1979 Oil Crisis that brought serious gas shortages were a result of political disruption. It was a time when stations ran out of gas, lines of cars snaked for blocks as drivers tried desperately to keep their tanks full and their car-dependent lives on track, and consumers looked for more fuel-efficient vehicles to ease their pain. The problem, however, was there were few fuel-efficient models being produced since there had been no particular demand for them. The auto industry had to adapt, but with typically long product cycles it would take years to adequately fill this need.
Segue to 2003 and the launch of Tesla Motors, an occurrence that seemed interesting but hardly a threat to legacy automakers. Its high-tech Tesla Roadster introduced in 2008 – based on engineless ‘gliders’ produced by Lotus – proved that electric cars could be sporty, fun, and go the distance in ways that all other electrics before it could not, to the tune of 250 miles of battery electric driving on a single charge. Then came the Tesla designed-and-built Model S, Model X, and the new-to-the-scene Model 3. Clearly, the battle for leadership in electric cars was underway.
The auto industry’s penchant for innovation has always characterized its giants. Over its long history, this is an industry that brought us the three-point safety belt, airbags, anti-lock braking, cruise control, direct fuel injection, electronic ignition, and near-zero emission gasoline engines. And let us not forget Kettering’s invention of the electric starter that first saw use in 1912 Cadillacs, an innovation that tipped the scales – and history – in favor of internal combustion over electric cars of the era and helped lead to the combustion engine’s dominance to this day.
While Tesla may have established its role as the industry’s electric car innovator, that’s not to say that legacy automakers haven’t made tremendous progress. GM’s short-lived EV1 electric car of the 1990s proved that exciting and fun electric cars were possible, but not necessarily affordable to make at the time. The technologies developed by GM through the EV1 program live on to this day with evolutionary electric-drive technology found in its acclaimed Chevrolet Bolt EV and other electrified models. Advanced battery electric production vehicles have also been a focus at Audi, BMW, Ford, Honda, Hyundai, Jaguar, Kia, Mercedes-Benz, Nissan, Smart, and VW, with others like Porsche set to enter the market with long-range battery EVs.
So here’s the lesson of the day: If a business model no longer works, as was the case with General Motors and Chrysler during the financial meltdown in the late 1990s, you restructure. A brand no longer resonates with consumers? You drop it, like GM did with Oldsmobile. And if a class of vehicles is falling out of favor in lieu of more desired ones, you move on, as Ford is doing by phasing out almost all of its passenger cars in coming years in favor of more desired crossover/SUVs and pickups.
A paradigm shift is also occurring as automakers grapple with changing consumer preferences, regulatory requirements, and the projected demand for future vehicles and technologies. Enter the age of electrification. Over the past decade, Tesla has set the bar for innovative battery electric propulsion, advancements in near-autonomous driving technology, over-the-air vehicle software updates, and more. It has achieved a real or perceived leadership position in these areas and that’s a threat to legacy automakers. Now automakers are responding in a serious way and Tesla itself is under siege.
GM fired the first volley with its 2017 Bolt EV, beating Tesla’s long-touted Model 3 to market with an affordable long-range EV capable of traveling 238 miles on battery power. While Tesla is now delivering its well-received Model 3 in increasing numbers after a series of production challenges, the race with GM to produce an ‘affordable’ mainstream EV with 200-plus mile range was not much of a race to affordability at all. GM won that one handily, holding the line with a $37,500 price (after destination charges), while Tesla’s $35,000 Model 3 has yet to materialize. As Tesla did with its earlier model launches, the automaker is delivering uplevel, high-content, and higher-performance versions first, in the case of the Model 3 from a recently-lowered base price of $42,900 to $60,900, depending on configuration. The Bolt EV’s MSRP has moved in the other direction, dropping slightly to $36,620 for the 2019 model.
Nissan’s all-new, next-generation LEAF that debuted in 2018 improved its range to 150 miles, with a recently-announced LEAF PLUS model joining the lineup with a bigger battery and a range of 226 miles. Hyundai’s 2019 Kona Electric and Kia’s 2019 Niro Electric offer a battery range of about 250 miles, although these offer availability only in California and perhaps a few other ‘green’ states.
Jaguar’s 2019 I-PACE, a fast and sporty crossover with a 234 mile battery electric range, is now available and priced to compete with Tesla’s Model S and X. We'll soon be seeing Audi e-tron and Porsche Taycan long-range electrics on U.S. highways, with others like Aston Martin and Maserati developing high-end electric models as well.
It will be interesting to see how this all plays out over the coming months and years. To be sure, legacy automakers will not cede their leadership positions and market share without a terrific fight… and that fight is intensifying. Tesla doesn’t fear risk and has shown it will go in new directions that others will not, unless they must.
But Tesla doesn’t operate like legacy automakers that have been around for a long time, some more than a century. Those companies have mastered mass production, fielded extensive model lineups, developed widespread and convenient service networks, and have a history of successful worldwide distribution. Tesla is still learning this game, although it is making headway with its intense and successful efforts to deliver increasing numbers of its Model 3 to customers.
Importantly, legacy automakers are immensely profitable, while Tesla has had but a few profitable quarters since its launch and its losses have been in the billions. Tesla’s well-documented difficulties in ramping up mass production of the company’s 'entry-level' Model 3 – and its initial deliveries of only up-level Model 3 examples at significantly higher cost than its widely-publicized $35,000 base price – have added to its challenges.
That said, it would be a mistake to count Tesla out for the long haul based on its current and historic challenges including missed financial and vehicle delivery targets, serious Model 3 production challenges, and a number of high-profile Tesla crashes while driving on its much-touted Autopilot. Regardless of all this, in 2018 Tesla’s Model 3 was the best-selling luxury model in the U.S.
Legacy automakers will have Tesla directly in their sights and Tesla will continue to innovate. A veritable race-to-the-finish!
The 2018 Lexus LC 500 and 500h grand touring coupes are striking and refined in ways that will make buyers in the prestige/luxury sector of $100,000+ cars take notice, though the LC 500h hybrid slides in just below that mark with a base price of $96,510. Just 400 of these new models are being produced each month, which means there’s also an element of exclusivity that prestige car buyers and early adopters seek.
In Toyota’s sights are competitive models like the Mercedes SL, Jaguar F-Type and BMW 650i, high-end cars that can serve as daily drivers while highly capable as international touring vehicles. The LC 500 coupes keep the romance of crossing Europe safely at high speed and comfort a practical reality. Note that the LC 500h is particularly fuel efficient for a high-performance car, given its EPA rating of 26 city and 35 highway mpg.
These coupes have an entirely new platform designated as GA-L (Global Architecture - Luxury). Design goals achieved are a low center of gravity for improved handling and chassis stiffness that exceeds even the half-million dollar Lexus LFA supercar. These characteristics were well-proved during drives where roll and lean were never an issue in tight corners, even as the model delivered high marks for comfort and handling.
We had the opportunity to drive and compare both the 471 horsepower V-8 and the 345 horsepower Multi-Stage Hybrid V-6 with twin electric motors. Both versions have their own personality with only three-tenths of a second performance differential from 0-60 mph, in favor of the V-8. Our focus here is on the 500h and what makes it a distinctive and top contender for prestige clients.
Power in the LC 500h is derived from an Atkinson-cycle, 3.5-liter V-6 with direct fuel injection, variable value timing, and a redline at 6,600 rpm. This engine accounts for 295 horsepower and 256 lb-ft torque. The hybrid system allows the LC 500h to operate with the gas engine off at speeds up to 87 mph.
The hybrid system includes twin MG1 and MG2 permanent magnet motor-generators. MGI’s primary function is generator, engine starter, and control of engine speed. MG2 drives the rear wheels and handles regenerative braking. The car’s compact lithium-ion battery is comprised of 84 cells and is located between the rear seats and luggage compartment. Total system power is 354 horsepower, sufficient to deliver 0-60 mph acceleration in 4.7 seconds, outstanding for a car that weighs 4,435 pounds. Top speed in electronically limited to 155 mph. Rather than aiming at being a track star, this is a 2+2 designed for safe touring in comfort at speed.
Hybrid Synergy Drive has evolved in the LC 500h. The hybrid powertrain retains its planetary-type, continuously variable transmission and has added a unique four-speed transmission. Working in concert, the two gears alter output in four stages to utilize the V-6 engine across the entire speed range. In M mode, the two gear sets act together to provide the effect of 10 ratios, giving the LC 500h a highly engaging feel and allowing the driver to shift though the ratios with paddle shifters.
Sport, Performance, and Touring Packages further personalize the LC5 500h. As expected in this level of automobile, all the latest safety systems are standard and include pre-collision with pedestrian detection, all-speed radar cruise control, lane departure with steering assist, sway warning, and an intelligent high beam headlamp system.
A signature Lexus spindle grill gives the LC 500h a distinctive and highly-recognizable look. In this application Lexus designed a unique mesh texture that changes visual tension as it spreads across the front of the car. Adding to the sleek look of the front end are ultra-compact triple LED headlamps with functional venting that adds aerodynamic stability and cooling.
Chrome plated moldings along the edge of the roof are meant to represent the lines of a traditional Japanese sword. Even the rear tail lights have a design element not previously seen, using mirrors to create a three-dimensional series of L-shaped graphics. The LC 500h rides on standard 20-inch cast aluminum wheels with run-flat 245/45RF20 tires up front and 275/40RF20 at the rear. Front brakes have 6 piston calipers with 4 piston calipers used at the rear.
The coupe’s monotone interior is exquisite with controls that are intuitive and require little movement to reach. An 8-inch LCD display with Eco driving indicator is set low in the cockpit. Door handles are sculpted in satin chrome. Alcantara-covered door panels feature a wave effect that complements the lines of the dash. All interior stitching is done by hand.
Happily, Lexus designers have retained an upright gearshift lever rather than resorting to a ‘pop-up’ dial shifter. Multimedia features combine a graphic user interface with upgradeable software, along with latest remote-touch interface touchpad. The instrument binnacle is unique in its singular look and design and is the lasted version of thin-film transistor display technology, first introduced in the LFA supercar. Traditional it is not, and it may be setting the new contemporary look for functionality. Our LC 500h test car came equipped with the optional Mark Levinson 835 watt, 7.1 channel, 13 speaker sound system tailored to the LC interior. This system includes Harmon Clari-Fi music tech that analyzes and improves the sound quality of compressed digitized music.
Toyota’s new flagship coupe is important to the company, a point driven home by the automaker’s commitment of a billion dollars over a five-year development period to launch the LC 500 and 500h grand touring coupes. We’re confident these will be well-received by prestige car buyers looking for efficiency and performance in a no-holds-barred, utterly distinctive, and imminently pleasurable vehicle.