By Alexandria Sage
LOS ANGELES (Reuters) - A lot of strange things can be found in Los Angeles, but a battery-powered Jaguar sport utility vehicle is something new even for Southern California.
The all-electric Jaguar I-PACE concept SUV, a preview of a vehicle Jaguar intends to start selling within two years, highlights how technology, regulation, shifting consumer tastes and cheap gas are converging to force automakers out of their traditional lanes.
Show visitors this week will also see the largest-ever Mini car offered by Germany's BMW AG (DE:BMWG) and a bevy of trucks and SUVs that Detroit automakers General Motors Co (N:GM), Ford Motor Co (N:F) and Fiat Chrysler Automobiles NV (MI:FCHA) will promote in luxury electric car maker Tesla Motors Inc (O:TSLA)'s home state.
FCA's Italian Alfa Romeo brand will also feature a new SUV, as will Germany's Volkswagen AG (DE:VOWG_p), which is trying to rebuild its image in California after the scandal over its cheating on diesel emissions tests.
With a mandate that zero-emission vehicles make up 15 percent of automakers' California sales by 2025, the state is driving carmakers to roll out carbon-free vehicles in an environment of uncertain future demand. At the same time, cheap gasoline is propelling a shift among U.S. consumers toward larger vehicles, particularly SUVs.
The move by Jaguar is a response to those conflicting pressures, executives said.
Recent company research indicated one quarter of Jaguar drivers would consider a battery-powered vehicle.
"There's no doubt the market is shifting," said Joe Eberhardt, CEO of Jaguar Land Rover North America. "There are differing views of how rapidly that shift is happening and to what degree. We want to be prepared."
Twenty percent of Jaguar's North American sales come from California. The brand is owned by India's Tata Motors (NS:TAMO).
"It's a very fluid time in the industry and I don't think there is a right or wrong or specific answer to what the next 10 years will be," Eberhardt told Reuters. "Which means we have to be flexible enough...to see what direction the market will take."
Jaguar has enjoyed strong U.S. sales of its 2017 F-PACE SUV, helping drive a 93 percent rise in year-over-year U.S. Jaguar sales from January until October. Until the F-Pace debuted this year, Jaguar had sold only sedans and coupes, leaving the SUV business to Tata's Land Rover brand.
The electric platform of Jaguar's new SUV available in 2018, with its 90kWh lithium-ion battery pack and targeted range of 220 miles, had to be built from the ground up.
Co-development with Tata Motors, itself working on electric and hybrid vehicles, was not feasible given the differences between market segments and needs, Eberhardt said.
The I-PACE targets the same wealthy, environmentally aware consumers now driving Tesla's Model X SUV. But Eberhardt said Jaguar's vehicle will be "a much lower price point" than the most premium Model X offering, which fully loaded can cost about $130,000.
Other luxury carmakers from Audi to BMW and Mercedes-Benz have announced, but not yet launched all-electric SUVs, and Eberhardt said he believed Jaguar would beat them to market.
"Out of the established car makers, we really are the first. Which has advantages but on the other hand it's unchartered territory."