When the Tesla Model S launched four years ago, the all-electric luxury sedan certainly had its critics.

Many of them were executives at German luxury carmakers, quick to dismiss the upstart American carmaker as a quixotic but doomed effort.

But as the Model S won plaudits, achieved respectable sales, and captured the public's imagination, that attitude has changed.

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And that was before Tesla racked up nearly 400,000 reservations for its Model 3 sedan, which is expected to compete with German mainstays like the Audi A4 and BMW 3-Series.

Now, Audi, BMW, Mercedes-Benz, and Porsche are downright worried about Tesla, a recent article in the Los Angeles Times argues.

"Tesla has promised a lot but has also delivered most of it," Dieter Zetsche—chairman of Mercedes parent Daimler—said earlier this month.

2016 Mercedes-Benz GLC300

2016 Mercedes-Benz GLC300

Mercedes and other German carmakers now have plans to launch multiple all-electric and plug-in hybrid models, but their slow reaction has forced them to cede ground to Tesla.

Despite the immense pride invested in the German car industry, and Germans' initial preference for German-made electric cars, Tesla outsold the electric offerings of every indigenous brand last year in their home country.

The total of 1,582 Model S sedans Tesla delivered was better than any of the German brands could muster.

ALSO SEE: How Audi, BMW & Mercedes Plan To Compete With Tesla--And Why (Oct 2014)

That's partly because, at the moment, the Germans only offer shorter-range electric cars like the BMW i3 and Mercedes-Benz B250e.

Tesla's success in Germany—and other European countries—is viewed as another gut punch by a car industry already reeling from the Volkswagen diesel scandal.

Daimler executives were harangued by shareholders at the company's annual meeting this month in Berlin for letting Tesla gain such an advantage.

Audi e-tron Quattro concept, 2015 Frankfurt Auto Show

Audi e-tron Quattro concept, 2015 Frankfurt Auto Show

Defending the company, Zetsche noted that Tesla continues to lose money, something Daimler shareholders likely wouldn't tolerate over the long term.

Daimler also does have some electric cars in the works, including a crossover based on the current Mercedes-Benz GLC-Class platform.

Other German firms are planning their responses with potential Tesla rivals as well.

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BMW is rumored to be planning an extended-range electric model larger than the current i3, possibly called i5.

Audi has already confirmed that it will launch an all-electric SUV in 2018, based on the e-tron quattro concept from the 2015 Frankfurt Motor Show.

Corporate cousin Porsche will launch a production version of its Mission E sedan concept—also unveiled last year in Frankfurt—before the end of the decade.

Porsche Mission E concept electric car

Porsche Mission E concept electric car

But could all of this be a case of "too little, too late?"

By initially dismissing Tesla, German carmakers made the same mistake as companies that discarded German inventions like the fax machine and MP3 player, said Claudia Kemfert.

She's the head of energy, transport, and environment at the German Institute for Economic Research; that shortsightedness enriched others outside of Germany, she noted.

Yet while the German carmakers are behind, they may not be out of the race yet. Tesla must still actually get the Model 3 into production, for instance.

And given their combined resources, it would be unwise to rule out the established German firms making good on their promises to build Tesla-rivaling cars.

The next few years promise to be quite interesting indeed.


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