Tesla Model 3 = 24% of Small & Midsize Luxury Car Sales in USA*
Published on October 7th, 2019 |
by Zachary Shahan
October 7th, 2019 by Zachary Shahan
The Tesla Model 3 has taken the US luxury car market by storm. When sales soared through the roof in the second half of 2018, making the Model 3 far and away the best selling luxury car in the country and the best selling car car of any type in terms of revenue, fans were excited for the launch of a new era. Critics, on the other hand, saw it as a temporary boom from early reservation holders that would soon be over, then resulting in a crash in Tesla sales, Tesla financials, and the company as a whole.
The core difference between the fans and the critics seems to rest in how these different followers of the company have expected the general public to respond to the Model 3 and its many benefits. Critics apparently expected a “meh” response. Tesla fans, of course, expected that the market could be huge for a car that has better performance and drive quality than a BMW 3 Series, much better tech than an Audi, and a potential cost of ownership of a Camry or Accord (depending on various individual and market circumstances).
At the moment, while the verdict isn’t final, things are looking good for Tesla and Tesla fans. We don’t know precise Tesla Model 3 sales figures in the US, and even educated estimates are very rough estimates until we get more data from Europe and China, but our expectation is that there were between 40,000 and 50,000 deliveries in the US in the third quarter. On the more conservative side, we’ve estimated 43,000 US deliveries. That blows away sales of any other midsize or small luxury car.
The next two charts are interactive charts. You can click through the circles near the top to go from quarter to quarter. Note that these interactive charts do not work well on all phones. In general, they are best viewed on a computer.
Pulling in data from almost all other auto companies, 43,000 third quarter (Q3) deliveries would mean that the Tesla Model 3 accounted for 27% of all small and midsize luxury car sales in the country (note that we are only talking about cars here, not pickup trucks and SUVs).
Based on these figures and earlier estimates, for the first three quarters of the year, the Model 3’s small & midsize luxury car market share was 24%. The model’s weakest quarter was the first quarter, when Tesla finally started shipping cars to Europe and China, and when US consumer demand was lower anyway due to a 50% reduction in the US federal tax credit for Tesla vehicles starting. (Tesla was the first company to deliver 200,000 electric vehicles in the country, which led to a tax credit reduction from $7500 to $3750 on January 1, 2019. On July 1, that went down to $1875. On January 1, 2020, unless Congress changes something — which seems unlikely with the grim reaper running the show and killing everything in sight in the Senate — the tax credit for Tesla buyers will go away completely, while all other automakers will still benefit from the tax credit because they were electrification laggards. I know, it’s odd.)
While a 24% market share — 1 out of every 4 sales in this market — seems wild, the thing that blows the minds of many Tesla Model 3 owners is that anyone is still buying an Audi A4, Volvo S60, BMW 320i, Mercedes C300, etc. These cars and others in this class don’t match up well against the Model 3 in any important way, and they are much worse in several ways. That said, we know the main reasons why Model 3 sales aren’t higher — most consumers aren’t aware of the car, know very little about the car, haven’t driven or ridden in the car, or have negative misinformation in their heads about Tesla and the Model 3.
One thing to keep in mind, especially now that Capital One has published about it, is that the resale values of used luxury car competitors are suffering now that the Model 3 is on the market in full flow. As resale values of these BMW, Mercedes, Audi, Lexus, Acura, and other luxury cars decline, companies that lease them have to raise their leasing prices in order to cover costs — which makes them even less attractive. Consumers who buy these models and see them drop in value so deeply so rapidly are more likely to reconsider their brand allegiance and perhaps jump ship to Tesla.
Where will Tesla and its Model 3 go from here? We’ll keep you updated as more registration data come in from Europe, China, and elsewhere and as the market evolves.
*Tesla reports quarterly sales and does not break them out by country or region. Eventually, we get registration data from Europe, China (educated estimates at least), and Canada and can then make a more solid estimate of US sales for the quarter, as well as monthly sales estimates. However, it’s a bit early for all of that since we don’t have September numbers from most countries yet. Even our data-loving friend and contributor Jose Pontes of EV Volumes didn’t want to venture out too far on a limb and provide an early estimate that he might have to walk back. That said, looking at previous months’ data, September figures from the Netherlands and Norway, and deeper historical data, I feel comfortable estimating Model 3 sales between 40,000 and 50,000 in the US in the third quarter. For this report, I’ve settled on 43,000.
If you’d like to buy a Tesla Model 3 instead of a Camry, Accord, Civic, or Corolla, and you’d also like to get 1,000 miles of free Supercharging in the process, feel free to use my referral code: https://ts.la/zachary63404.