LOS ANGELES— Tesla Motors Inc. TSLA +0.44% is about to get deep pocketed rivals in the luxury electric luxury car market after largely having the business to itself since the 2012 launch of the Model S sedan.
BMW AG BMW.XE -0.13% , General Motors Co. GM +3.16% 's Cadillac and Volkswagen AG VOW3.XE +0.46% 's Porsche and Audi brands are among the luxury brands using this week's Los Angeles Auto Show to promote new plug-in models aimed at affluent, eco-conscious Californians who make up the heart of Tesla's buyers.
Wealthy car buyers "can afford to have another vehicle" to deal with long road trips, says Devin Lindsay, an analyst with forecasting company IHS Inc. As more auto makers follow Tesla's move to make electric cars a luxury lifestyle accessory, "buyers are going to have a lot of choice," Mr. Lindsay says.
Established luxury brands are muscling on to Tesla's turf in part because government policies are forcing them to, and in part because they see Mr. Musk peeling away influential trend setters they don't want to lose.
"If you look at Audi buyers, they are interested in high tech, they are young, progressive and affluent," says Scott Keogh, head of Audi's U.S. arm. That is why Audi is promoting the A3 etron plug-in hybrid model at the Los Angeles show, ahead of its early 2015 launch.
Audi eventually will have an all-electric model, Mr. Keogh says, though he won't say when. Rudolf Krebs, the VW Group executive Vice President in charge of electric vehicle programs said Audi will get plug in hybrid versions of its A6, Q7 and A8 models next year as part of a broader VW Group strategy to roll out 40 plugin hybrid or battery electric models over the next several years.
BMW is highlighting the i8 plug-in hybrid sports car at the LA show, The car, with a starting price above $135,000, has a carbon fiber body architecture and is propelled by electric motors in the front, and a three-cylinder gasoline engine in the back. BMW is also launching early next year a second electric model, the BMW i3, which is a small "city car" that will start at about $40,000 in the U.S.
"California plays a pivotal role in this technology," says Ian Robertson, BMW's global sales and marketing chief. The state's mandates requiring auto makers to sell more electric or plug-in vehicles are a major factor in auto makers' decisions to launch such vehicles. But there is also consumer demand, Mr. Robertson says.
Since BMW began offering test drives in the i3, about 100,000 people have signed up world-wide, including about 45,000 in the U.S., Mr. Robertson said. As for the i8, he said, "we are sold out for the whole of next year."
Tesla Chief Executive Elon Musk has assured analysts he isn't concerned. Tesla didn't have a display at the LA Auto Show this year, a spokeswoman said. Mr. Musk has said the company doesn't need to try to generate more demand right now.
"I think there's a huge amount of untapped demand in North America," he said, regarding his company's outlook. Mr. Musk has said he expects Tesla can eventually sell 500,000 cars a year.
"I really do encourage other manufacturers to bring electric cars to market," Mr. Musk told analysts in a conference call earlier this year. "They need to bring it to market and then keep innovating and improving and making better and better electric cars."
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