Porsche Plans to Spend $1.09 Billion to Develop Electric Sports Car

Tesla Motors (NASDAQ: TSLA) now has some serious competition. Porsche, a subsidiary of Volkswagen (OTC: VKAY), plans to spend $1.09 billion (€1 billion) to bring its electric sports car, the Mission E, to market, our friends at Seeking Alpha reported.

Porsche’s electric vehicle investment will include the construction of a $761.67 million (€700 million) electric vehicle factory in Stuttgart, a press release indicates. The plant will employ more than 1,000 people and include a new paint shop and assembly area.

Porsche’s Tesla Killing Mission E

This seems to verify the theory that Volkswagen will be a serious player in the electric car market and Tesla’s biggest competitor. If it lives up to the hype, the Mission E will rival or exceed the vaunted S series in performance. Its performance specifications are impressive, and they include:

  • A power system that can handle 440 kilowatts of electricity.

Mission E

  • An acceleration rate of 0 to 100 kilometers in less than 3.5 seconds faster than a Porsche 911.

 

  • A range of 500 kilometers on a charge of electricity.

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  • A quick charge system that can fill the battery to 80% capacity in 15 minutes.

 

If this is true, Tesla is going to have a hard time keeping up with the Porsches and other Volkswagen products, particularly in the United States, where Porsche has a great reputation and a potent dealer network.

Volkswagen’s investment certainly validates Elon Musk’s business model because it proves he was right about electric luxury cars. What remains to be seen now is if a mass market electric vehicle could be commercially viable.

From Porsche’s announcement, it sounds as if it is now possible to build electric cars with performance that matches, and in some cases, exceeds that of gasoline or diesel powered cars. The problem will be getting the public to buy them, particularly with car dealers in the United States refusing to sell such cars.

Electric Cars could be Worse for Environment than Gasoline Vehicles

Another problem that companies like Porsche and Tesla will have to deal with is pollution from electric cars. Researchers at City Lab discovered that electric cars running on electricity produced by coal-fired power plants actually caused more pollution than gasoline burning vehicles.

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The researchers also found that electric vehicles only benefited the environment in places where electricity was produced with relativity nonpolluting means, such as hydropower. This indicates such cars could face a backlash at some point, particularly in regions where they are heavily subsidized.

One strong possibility is that car dealers will have to start generating electricity for these vehicles. That could be expensive, but it might be imminent; remember, Tesla is already providing filling stations for electric vehicles in the form of its Superchargers. Generating all or part of the power could be the next step, and that could be an expensive one.

Volkswagen just proved electric cars are here to stay. Unfortunately, it has not answered a number of important questions about these vehicles.