(The Mercedes EQ.Reuters/Benoit Tessier)
Mercedes-Benz made a brilliant move when it unveiled its intention to corner the EV market by first offering an all-electric SUV.
The German automaker showed off its electric SUV concept, the EQ, at the Paris Motor Show on Thursday. The concept is expected to get a range of up to 310 miles, and Mercedes said the production model of the car is expected to hit the streets in 2019.
Mercedes said the electric SUV will fall in the same price range as its GLC Crossover, which currently starts at $39,150.
Mercedes' impending EQ roll out should scare Tesla for one main reason: The EQ is an SUV.
(The interior of the Mercedes EQ.Mercedes-Benz)
Business Insider's Matt DeBord recently called attention to the fact that interest in small cars is waning. Edmunds, a consumer-oriented auto site, unveiled a report in August noting that it's a great time to buy smaller vehicles at used-car shops because "there is so much more demand for used trucks and SUVs."
In fact, passenger-car sales fell over 12% in August, while truck and SUV sales rose 2%, according to the firm Autodata. That stat fits into the larger trend of passenger-car sales declining over time.
Now keep in mind that EVs as a whole have yet to have their time to shine. Electric cars make up roughly 1% of global auto sales. It's likely a big reason for that is the limited range potential for electric cars.
So if you're going to try and corner the electric-car market, it makes more sense to invest in a solid, all-electric SUV, because at the very least you're giving consumers some semblance of what they want. Considering electric cars have yet to garner real traction, pushing electric sedans at a time where smaller car sales are already falling is a tough hill to climb.
(The Model X comes with a hefty price tag of $100,000.Tesla Motors)
Dieter Zetsche, the head of the Mercedes-Benz car division, made note of this reality during the EQ's unveiling at the Paris Motor Show.
"We chose to launch our EV family with an SUV for good reasons. Key among them is the ever rising popularity of this class of vehicles, particularly with our Mercedes customer base," Zetsche said at the event. "Since we want customers to love electric cars we will start with the cars they love most."
Now, to Tesla's credit, it does offer the Model X SUV. But with a hefty price tag of $80,000, the Model X really only appeals to those in the luxury-car market.
Tesla does have plans to bring an affordable, compact SUV, the Model Y, to market, but there's no timeline on when we can expect to see it. Considering Tesla is ramping up production to get the consumer-friendly Model 3 sedan to consumers on time in late 2017 or early 2018, it's safe to say we won't be seeing the Model Y soon.