Electric Mercedes opens German assault on Tesla

STOCKHOLM/PARIS, Sept 3 (Reuters): Mercedes-Benz is set to unveil its much-anticipated electric SUV on Tuesday, marking the start of a German onslaught against Tesla's dominance of the fast-growing market for premium battery cars.

Daimler-owned Mercedes, BMW and Volkswagen's Audi and Porsche divisions are all gunning for the $52 billion Californian upstart, with early publicity efforts emulating its tech-industry halo.

The market for upscale electric cars is Tesla's to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 cars this year and almost double that in 2019.

The Mercedes EQC - whose launch program in Stockholm features yoga in a direct appeal to the Millennials who have flocked to Tesla - is the first production model under the carmaker's electric EQ sub-brand. It will be closely followed by similarly hyped debuts for BMW and Audi.

"While Tesla currently has a strong hold on the luxury electric market, I don't think this will be the case after the arrival of the German premium offerings," said Wajih Hossenally, an automotive powertrain analyst with IHS Markit.

"Tesla has virtually zero competition - but this will change from 2019 onwards."

Rival forecaster LMC Automotive agrees, predicting a steady decline in Tesla's share of an exploding electric-car market over the next decade, from today's 12.3 per cent to 2.8 per cent, even as its absolute sales continue to rise.