Did Audi Just Bridge Tesla Motors' Moat?

Audi said this week that its overhauled R8 sports car will be offered in an electric version with range that rivals that of Tesla's Model S. Source: Volkswagen Group.

Volkswagen Group'sAudi brand released the full scoop on its revised R8 sports car this week -- and it includes a detail that should get the attention of investors in Tesla Motors .

Most of the news about the overhauled R8 involved its gasoline engines. The car will be available with two versions of Audi's hot V10, one of which will generate over 600 horsepower.

But way down in Audi's press release, the company revealed that it will also offer an electric version of the R8, called the R8 e-tron -- with a battery that could rival Tesla's vaunted power packs.

Audi appears to have duplicated Tesla's special sauce...What's special about a Tesla Model S? The big sedan is a high-tech tour de force, and there's quite a bit that's special about it. But the real special sauce is in the battery pack, which gives the Model S its acclaimed long range, well over 200 miles.

Tesla's Silicon Valley software wizards came up with a way of managing an electric car's battery pack that optimizes range. That's the challenge with an electric car right now, because batteries are heavy and expensive. Every automaker building an electric car wants to get as much range as possible out of its batteries.

Tesla's top-of-the-line battery pack holds 85 kilowatt-hours of juice, and it's said to weigh about 1,200 pounds. That's the industry standard right now -- but Audi may have matched it.

Audi says that the battery pack in the new R8 e-tron was developed and produced in-house, using a "newly developed lithium-ion technology which was specially conceived for a purely electric vehicle drive." It has a capacity of 92 kilowatt-hours, Audi says, and according to a report in Germany's Motor Talk, it weighs about 600 kilograms.

Its power density -- kilowatt-hours per kilogram -- is about the same as Tesla's, in other words. That's a big deal.

...but Audi isn't quite ready to take on TeslaIt sounds like Audi's new battery technology isn't quite ready for prime time, though. Audi's statement said that the new R8 e-tron is primarily a "mobile high-tech laboratory," and that its experience with the new sports car would help in creating an electric sedan in the future. But it will offer the car -- starting this year -- to customers by special order. (Translation: Bring lots of money.)

What will those customers get for their money? They'll get an R8 that goes from 0 to 100 kilometers per hour (62 miles per hour) in 3.9 seconds, Audi says, and a claimed range of 450 kilometers (about 280 miles).

The range is competitive with Tesla's, but the R8 e-tron will lose a drag race against the hottest Model S: the new all-wheel-drive P85D. (To some extent, that reflects another Tesla software advantage: Tesla's traction control system, which helps tires grip the road under hard acceleration, is really, really good.)

The new P85D version of Tesla's Model S offers spectacular acceleration, even in slippery conditions, thanks to its dual-motor all-wheel-drive and some very sophisticated software. Source: Tesla Motors.

And while Audi hasn't yet announced a price for the built-to-order R8 e-tron, I suspect that the Model S P85D's starting price of $104,500 will be a bargain next to the German speedster's price tag.

Still, it's a big step forward for Audi, and for its corporate parent Volkswagen Group, and it's likely to lead to several Tesla competitors over the next few years.

This will be much bigger than one Audi sports car Where else will this battery pack end up? Audi's statement hints heavily at a future electric sedan, but there's a Porsche in this picture, too.

Porsche is another VW Group property, and it's believed to have an all-electric luxury sports sedan under development. This new 92 kWh battery pack would give that Porsche ample range to compete with Tesla -- and it's safe to say that any car with a Porsche badge will have the speed and handling angles well-covered.

Long story short: If you like sporty, luxurious electric cars, some very interesting choices are coming. But is the market for such cars big enough to support Tesla's ambitious growth plans and an assault from the mighty VW Group and its near-bottomless budget? We'll find out.

The article Did Audi Just Bridge Tesla Motors' Moat? originally appeared on Fool.com.

John Rosevear has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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