Called the Audi e-tron quattro, the sporty SUV concept auto will provide the first look at the luxury brand's plans for fully electric cars. Audi, a division of Volkswagen, is expected to produce an electric SUV based on the concept starting in 2018.
Audi already makes plug-in hybrids, which run on electric power alone for a certain range until a gasoline engine kicks in.
The Audi will compete directly with Tesla's Model X, which is just going into production at Tesla's factory in Fremont, Calif. The first deliveries are expected next month, said Elon Musk, chief executive of the Palo Alto automaker.
Automakers have watched Tesla carve out a luxury electric car niche and are preparing their own entries, said Thilo Koslowski, vice president and automotive practice leader at Gartner Inc.
"You are going to see some interesting stuff happening as the traditional automakers get into this," he said.
The new vehicles will compete on driving range, which previously was among the top advantages of Tesla vehicles.
"Once you get over 200 miles, you are making something that is applicable for consumers," Koslowski said. "They don't have to change their behavior."
Auto Motor Und Sport Germany's top auto magazine is reporting that Mercedes is going to abandon the electric powertrain it purchases from Tesla for its electric B-class car for a new system with a range of about 300 miles. The vehicle's current range is under 100 miles.
It's not clear when the extended range B-class might be on the road.
That's why Koslowski doesn't write Tesla off, even in the face of growing competition from venerable luxury brands.
"Tesla still has a timing advantage, as much as three years," Koslowski said, "and that is pretty important."
Like Tesla's Model S sport sedan and its upcoming Model X crossover, the Audi SUV is designed from the ground up as an electric car. The German automaker says it will have the best aerodynamics among SUVs. The underbody, for example, is completely closed.
There are movable aerodynamic elements at the front, on the sides and at the rear to improve the air flow around the car. This all contributes to a range of 310 miles -- comparable to many gasoline vehicles.
While Audi isn't releasing many details or an expected price, it described the e-tron quattro as a vehicle between the size of the Audi Q5 and the Q7. It features a typical SUV body and flat, coupe-like cabin. But the interior fits only four passengers compared with the five to seven in other crossovers and SUVs. That and other features could change by the time the production version of the vehicle is unveiled.
The SUV will be powered by a lithium-ion battery located between the axles and below the passenger compartment, giving the vehicle a low center of gravity, an advantage over conventional SUVs.
The drive system is related to the Audi R8 e-tron sports car. It will have three electric motors – one on the front axle and two on the rear axle, giving it electrified all-wheel-drive.
Tesla originally said it would start manufacturing the Model X at the end of 2013, with sales to begin last year, but the program is behind schedule.
The Model X, designed at Tesla's studio in Hawthorne, will fit seven adults in three rows of seats, the automaker said. It will use Tesla's flat battery pack, positioned on the underside of the vehicle. That clears space in the cabin and also allows for a second trunk under the hood.
The Model X looks more like a crossover than a conventional sport-utility vehicle and features falcon-wing doors that lift up and out.