Tata Motors (TTM) - Get Report , the Indian conglomerate, displayed its new Jag Monday night in Los Angeles, a market where it hopes to be selling quite a few when the car goes on sale in 2018. Though pricing wasn't announced, I-Pace will probably cost in the neighborhood of Tesla's Model S, which currently sells for about $90,000.
While I-Pace carries the SUV designation, it looks very much like a sportier, slightly modified sedan with a bit more cargo room, a hatchback and an elevated stance. Jaguar will equip the car with a 90-kilowatt battery, permitting a zero to 60 mph acceleration of four seconds and a range of 220 miles or more.
Speaking of the new model's design cues and layout at the debut, designer Ian Callum said "our brief was to create a spacious performance SUV that could comfortably carry five people. Otherwise we had a clean sheet of paper."
Unlike some early electric vehicle models, I-Pace's body and battery don't rely on existing hardware. Thus, Jaguar could design a purpose-built vehicle with a low center of gravity that delivers tight handling on top of the quick acceleration that comes with electric drive, a benefit that helped make the Tesla Model S popular with reviewers and owners.
German automakers Daimler (DDAIF) , Volkswagen (VLKAY) and BMW have stepped up electrification programs in response to looming zero-emission regulations in the U.S. VW's Porsche subsidiary showed a high-powered EV concept last year in Germany called the Mission E, seemingly aimed straight at Tesla owners and intenders. Local Chinese automakers, responding to encouragement and incentives from their government, are bringing out new EVs, mostly aimed at mainstream customers.
Anton Wahlman, an analyst and Tesla skeptic, suggested that Jaguar could charge as little as $75,000 for its new model and, if they prove popular, create even less expensive versions with slightly smaller and less powerful batteries.
"The Jaguar I-Pace will constitute formidable competition for Tesla -- and all the other premium electric cars -- starting no later than the second half of 2018. This cannot bode well for pricing power and therefore margins," he said.
Another difficulty could be the regulatory stance of the new presidential administration of President-elect Donald Trump, backed by a Republican Congress contending sky-high levels of public debt. Electric vehicles rely in part on state and federal subsidies to reduce their price, which may narrow or vanish depending on policy and budget.
I-Pace began as an idea two years ago and will take an additional two years to reach showrooms -- too late for a change of direction. The company isn't saying where the model will be built. One possibility is a contract manufacturer that builds low-volume models for automakers on a fee basis, circumventing the need for a large and potentially risky investment in a new factory or assembly line.
Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.