Tesla in Hot Pursuit of Police Electric Cruiser Market

L.A. Police Department's BMW i3 and Tesla Model S cars on display at recent trade show.
L.A. Police Department's BMW i3 and Tesla Model S cars on display at recent trade show.LAPD

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.
/ Source: CNBC.com
By Jeff Daniels, CNBC

Tesla looks like it may be in hot pursuit of a new market.

The electric car company's Model S sedan is being tested by the Los Angeles Police Department, the police force in the nation's second-biggest city. Testing has been underway for nearly a year, and the agency has two Model S P85D loaner cars.

"Tesla definitely stepped up and gave us the Model S to do some evaluation with them," said LAPD Police Administrator Vartan Yegiyan. Tesla is working with the agency "to assess the vehicle's performance in our environment and to learn what are the drawbacks and positives of this type of vehicle in our fleet operation. Not only on the regular transportation side, but also the future in the high-pursuit-rated vehicle arena."

Tesla declined to comment for this report.

The LAPD doesn't rule out the Tesla as a future option, at least in the longer term, despite the current lofty price.

"Is it practical now? No," Yegiyan said, but he added that over "the next three to five years ... not only will the industry push toward electrification, but prices will drop on vehicles. More models will be coming out, and the electricity and electrical grid will become more robust, and more charging stations will be available. While that's occurring we'll be in the space learning and contributing to the process."

Read More from CNBC: Why Former Wall Street Darling Tesla Has Slipped Into Reverse

The Tesla Model S P85D carries a manufacturer's suggested retail price of around $100,000, although some models are cheaper. Ford's Explorer-based Police Interceptor SUV, the nation's top-selling police model, has an MSRP of nearly $30,000; that can rise to the range of $45,000 to $50,000 when outfitted with the LAPD's police equipment.

In addition, the LAPD is testing the all-electric BMW i3, which has a MSRP of about $43,000. The department already has purchased more than 20 electric scooters and about a half-dozen electric motorcycles used by patrol officers.

"In California, there's pressure from above and there's also a desire on the part of the [electric vehicle] manufacturers to get their vehicles out there," said Tom Libby, an analyst at IHS Automotive. He said that generally, however, the concept of using the luxury-priced Tesla Model S for police departments or city use "doesn't make any sense from a budget standpoint."

Ford, with 61 percent share, dominates the U.S. police car market, according to the latest 12-month figures from IHS Automotive. General Motors' Chevrolet unit has about 21 percent of the market, while Fiat Chrysler's Dodge brand holds around 18 percent.

"We are a leader in law enforcement, and we intend to remain the leader," said Randy Freiburger, Ford police and ambulance fleet supervisor.

An all-electric police fleet could become a problem for some cities, particularly when hurricanes, tornadoes, floods and other natural disasters cause charging stations to go down. In 2012, Hurricane Sandy took out charging stations in Manhattan.

NYC's 1,300 hybrid vehicles

New York City recently outfitted about 1,300 Ford Fusion hybrids for mixed use between NYPD and other municipal agencies. Some police departments use Toyota's Prius hybrids for undercover work and traffic enforcement. Toyota said it is not in talks with the LAPD to lease any hybrids.

Read More from CNBC: Model 3 Demand Raises Key Question for Tesla

LAPD buys on average about 600 to 750 vehicles each year, representing a total cost of up to $30 million, according to Yegiyan. The Ford Interceptor SUV is the department's newest black-and-white patrol vehicle, replacing some of its aging Ford Crown Victorias. The Interceptor SUV police vehicles are tested for a 75-mph rear crash and have special braking and cooling system features not found on the retail model.

"Conventional electric vehicles already come with lots of technology," said the LAPD official. "They have many capabilities that conventional vehicles, or at least the brands that we purchase at the lower level, do not have. We have to pay top dollar to add or retrofit the vehicles."