Tesla noted on its earnings call Wednesday that new customers willing to shell out $50,000 for the Model 3 aren’t swapping out a luxury car in the same price range, instead they’re trading in cars that cost half as much.
Chief Executive Elon Musk said the top five cars traded for a Model 3 are the Toyota Prius, BMW 3-Series, Honda Accord, Honda Civic, and Nissan Leaf.
Each of those cars are among the most popular across categories. The Honda Civic is the best-selling compact sedan, the Accord is the second best selling mid-size sedan, the Prius is the best selling hybrid, the Nissan Leaf has been the best selling EV, and the BMW 3-series has been one of the most popular mid-size premium cars.
It’s a good sign that there’s real market demand for EVs. What’s more, consumers want style and performance and are willing to pay up for it.
Tesla’s earnings report also claimed that the Model 3 is already the best-selling premium mid-sized sedan in the U.S., a segment that includes the BMW 3-series, Audi A4, Mercedes C-class, Lexus IS, and Jaguar XE.
“In July 2018, Model 3 not only had the #1 market share position in its segment in the US, it outsold all other mid-sized premium sedans combined, accounting for 52% of the segment overall,” the report said. “The popularity of Model 3 is a true testament to the product. Based on trade-ins that we’ve received so far, we can see that the total addressable market for Model 3 is much larger than mid-sized premium sedans. We are drawing customers from many other segments, including non-premiums sedans and hatchbacks.”