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'Future will be electric': European carmakers take fight to Tesla

  • Traditional carmakers, such as Jaguar Land Rover, BMW and Ford have all sped up their respective plans to mass produce electric cars in order to challenge the likes of Tesla.
  • A global crackdown on diesel cars in the wake of Volkswagen cheating on emission tests has ramped up the pressure on automakers to rapidly develop electric alternatives.

Traditional European automakers are increasingly prioritizing the development of electric cars over combustion engines as they seek to gain market share in a space dominated by U.S. upstart Tesla.

"It is quite clear the future will be electric," Ralf Speth, Jaguar Land Rover chief executive, told CNBC on Tuesday.

"We are going to deliver a step-by-step complete electrified portfolio and from 2020 onwards all of our cars will deliver the option to be electrified," he added.

A global crackdown on diesel cars in the wake of Volkswagen cheating on emission tests has ramped up the pressure on automakers to rapidly develop electric alternatives.

Yet it's not just European automakers that should work upon this step towards a cleaner landscape. Another leading car firm explained to CNBC how this situation needs to be seen from "a global approach", as it's about how the world will produce clean electricity as well as fixing other issues such as looking into the carbon footprint of manufacturing the batteries.

"We need to embrace this electrification direction — with which (PSA Groupe) are fine — on a global approach, and not only on the mobility device itself," Carlos Tavares, chairman of the managing board at PSA Groupe said Tuesday.

'We will see battery cars faster than anybody expected'

Speaking on the sidelines of the Frankfurt Motor Show, Jaguar Land Rover's Speth argued a collaborative effort between governments and energy markets would ultimately alleviate any lingering worries throughout the industry.

Several automakers have previously expressed concerns that a lack of infrastructure investment could stall the rollout of electric cars over the coming years.

"I am absolutely confident we will see battery cars faster than anybody expected on the street and therefore all of the infrastructures will catch up," Speth added.

Traditional carmakers, such as Jaguar Land Rover, BMW and Ford have all sped up their respective plans to mass produce electric cars in order to challenge the likes of Tesla.

"We have got an investment of about $4.5 billion in electrified vehicles coming over the next few years. And the first one of those for us, as a specific electrified vehicle in Europe, will be in 2020," Steven Armstrong, EMEA president of Ford, told CNBC on Tuesday.

Armstrong explained the upcoming launch of Ford's electric model would be a "cross-over" style vehicle with a battery range of about 480 kilometers.

Audi chimed in with its own ambitious plans on Tuesday, explaining it hopes to produce new models for the eco-friendly consumers in the years to come.

"Audi is starting with a pure-electric car next year, with an SUV (which has) a range of 500 kilometers", Rupert Stadler, chairman of the board of management at Audi told CNBC, adding that it was "a good starting point" for the brand.

"Then I would say at least one additional car a year come to the market. So our expectation is until 2025, 30 to 35 percent of our cars will be pure electric, and of course the model range will be greater than ever," he added.

The chief executives of luxury automakers Bentley and Porsche also expressed their desire to get engaged with the new electric vehicle space, with Porsche planning on getting an all-electric car in the market by 2020.

Questions over 'user convenience'

Despite the buzz around electric vehicles, some automakers have expressed skepticism that consumers will embrace such cars immediately – especially given the current limitations in battery technology.

Toyota Chairman Takeshi Uchiyamada told CNBC in an exclusive interview last week that while the Japanese carmaker insisted it would be "no exception" in the development of electric cars, he raised questions over "user convenience".

A similar sentiment was echoed from across the pond, with Johan van Zyl, the CEO of Toyota Motor Europe telling CNBC that to "really see a big change" in electric vehicles, development still needed to be done when it comes to battery, charging facilities and the technology to fast-charge batteries.

While van Zyl admitted that it would take time for researchers to come up with the solutions, the chief executive did see a move towards electrification, which the company believed would eventually materialize in a multitude of areas, including hybrid and fuel cell vehicles.

Yet uncertainties still remain, with German carmaker Daimler warning on Monday that, at first, electric cars may only earn half the margin of equivalent vehicles with combustion engines.