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Model S Decimates Large Premium/Luxury Car Market

ggnykk

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Feb 7, 2016
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Except SUVS and CUVs have been around for decades and those who want one have always been able to buy them. And wouldn't Tesla be affected by the situation as well?

There's no way to spin this and I'm sure the Germans are still somewhat in denial but Tesla managed to decimate the upper end of the premium/luxury car market.

And they are just getting started.
Oh common, didn't you notice that there was a huge drop of gas price last year? And the numbers shown for the German Big 3 is specifically the change of sales between 2014 and 2015. Yes, SUV and CUV have been in the market for decades, but the numbers that you are looking at are specifically the rate of change in one year time span, not decades.

There are multiple reasons that causes drop of German sedans. Model S is only part of that reason, majority of the reason is because people are accelerating their pace of transitioning to SUV, in which that sudden acceleration is caused by sudden drop of oil price.

We could argue about this all day long, but saying German sedan sales drop last year is 100 percent because of Model S is just lack of understanding of statistics and market dynamics. Let's just wait until next year and see what the numbers will be like for 2016 full year, then we will know for sure. The change of oil price will be less of a factor that affect the market dynamics between year 2015 and 2016.
 

jerry33

(S85-3/2/13 traded in) X LR: F2611##-3/27/20
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Mar 8, 2012
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Oh common, didn't you notice that there was a huge drop of gas price last year? And the numbers shown for the German Big 3 is specifically the change of sales between 2014 and 2015. Yes, SUV and CUV have been in the market for decades, but the numbers that you are looking at are specifically the rate of change in one year time span, not decades.
I think the point was that if you are an S Class purchaser, then the price of gas for an SUV isn't going to be a major consideration. It's only whether or not you want an SUV or not. So I have a hard time believing that S Class purchasers went for an SUV instead due to gas prices. Chevy or Ford purchasers, yes.
 
Oh common, didn't you notice that there was a huge drop of gas price last year? And the numbers shown for the German Big 3 is specifically the change of sales between 2014 and 2015. Yes, SUV and CUV have been in the market for decades, but the numbers that you are looking at are specifically the rate of change in one year time span, not decades.

Oh come on, seriously do you think the cost of gasoline makes any difference whatsoever in this price segment? In the upper end premium car segment people buy the absolute best car then can find. Period. We'd still be looking to buy a Model S over an S Class even if gasoline was free.

Also no one said Tesla was responsible 100% for each of their competitors loosing market share. What is indisputable is that under the same scenario, Tesla managed to gain market share in the segment to become the leading premium car available to purchase in the upper end of the premium sedan market.

What's more astounding is that the competition will not be able to field a car remotely competitive with the Model S for at least another 2-3 years.
 
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Please provide the results. I don't care if I'm wrong, I am genuinely curious.

The phrase you're looking for is "conquest sales", and data of Model S doing so was discovered in 2014:

IHS Automotive Blog | Who is buying the Tesla Model S? | IHS Blogs

http://www.wired.com/2014/03/tesla-model-s-toyota-prius/

Quirky Fact: Toyota Prius Ranks #1 on Tesla Model S Conquest Buy List - LEAF is 7th - Inside EVs

The big difference was how writers interpreted the data then and now. Back then they focused on how Tesla's replaced Prius', but you can see in the data back then, as a whole, it hit the luxury-car makers harder. It's like the optical illusion "do you see the duck or the rabbit?" Or something like "is the dress gold or blue?" This thread seems dominated by the same sort of argument but in a different context. In 2014, people saw the Prius. Today people see the luxury car market.

As I commented on those stories then, the answer is: it's _both_. Tesla Model S, with its unique combination of efficiency and size and performance, appeals to both prospective Prius owners as well as prospective premium sedan owners, and the Model S is so good it captures sales from both markets.

I am a case in point of _both_. Technically my purchase previous to Model S was a Prius, so statisticians would consider my S purchase a conquest of a Prius owner. The truth is, despite my name on its title, I barely ever drive a Prius: my wife does because she must have the carpool lane stickers.

But my previous daily driver was a 2001 BMW M3:

Tesla Model S - Gas Free

When my family outgrew the M3, I needed a bigger car, but I wanted it to beat the M3's performance. If Tesla didn't exist, I might have bought a Porsche Panamera, a BMW M5, or an Audi A8 or S7. Fortunately, the P85 Model S was out when I needed it, and its specs beat all those at the time except the $175k Panamera Turbo S. I saw greater value per dollar in the S than in any other car.

So I think, if you poll me, I am an ideal example of a conquest sale in favor of Model S. And the correct word is "dominates", a feat we should all be proud of.
 
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Spidy

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Feb 7, 2015
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The small print on the ihs data is pretty important.

Conquest doesn't always mean disposal of original vehicle. If you can afford a McLaren or Rollce Royce a Tesla my just be another vehicle in you garage.

It was done November 2013. How many low specced Tesals were sold at that point? The now rather popular 70D did not even exist back then.
 

David_Cary

Active Member
Dec 17, 2012
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This thread has me wondering what I would have driven if not an S.

I had a Leaf but then got a job where I needed to go past that range (or too close to be comfortable). What would I have gotten. I shudder to think of the options. I'm guessing a used Volt - ouch it hurts to think about it. I could not have gone to ICE only. i3 rex maybe - but I doubt it. So Volt it is but then I would have had to sell the Leaf instead of giving to the wife since we would need a roadtrip car. It is all too incomprehensible to speak about....

On the SUV thing. I'm guessing people just started the trend back to SUVs - maybe the rich were following the middle class. Maybe they couldn't stand driving behind so many Explorers. Maybe the rich still hate $50 fill ups. Just a weird psychology. Like the guy I know in a 13000 sqft house with $1000 monthly electric bills who drove a Prius for many years. (He has a 2013 S and now has the biggest solar setup I've even seen on a house - 18kw).
 
well, I was one of those people who compared those exact cars and chose a Model S...actually moving from a 7. I also included the S8 in that search too. In fact, I don't think that Im alone.

Its true that the Model S isn't as decked out as either car; however, the market for those cars has an interest in the S and overall the appointments within the S satisfy that customer to the point of considering it in their purchase decision. I would call fit and finish on par but subjective to the things that the discerning eye is looking to measure. Overall the cars might be longer; however, unless you are getting the "L" version I would hazard to guess there is more cabin room in the S. There are other things to consider as well. Things like:

- drive quality (easily comparable)
- storage space (MUCH more; adding the center console and you can include interior storage too)
- maintenance (about 1/2 the annual costs)
- fuel costs
- tech (screen; auto pilot etc)
- overall design - there are positives and detractors for each)
- performance - I have the P85D

In the end, it may simply come down to taste...my money was behind the S. The total package gave me the answers I needed to move forward. And, as to your pricing comparison, I purchased a loaded up P85D that came to around $140K before the rebates. So, from a pricing perspective, I could have easily purchased a very well appointed 7 or S class and there isn't a 5 series on the planet that expensive...not even sure if the M5 can reach that target.

My 7 series was a nightmare right from the start...

I know everyone likes to compare the Model S to the 7-series and S-class, but I just don't really get it. The Model S starts at $70k ($60k with rebate). The 7-series starts at $81k. The S-class starts at $95k. The 7-series and S-class are considerably more luxurious than a Model S. The build quality, material quality, and just overall creature-comforts are not anywhere near luxury car standards in a Model S. So why is it being compared to them?

The 7-series and S-class are both 10 inches longer than the Model S. Strictly based on size, it's a lot more similar to a 5-series or an E-class.

So the cheaper, less luxurious, smaller Model S is outselling the more expensive, more luxurious, bigger luxury cars? Ok...

I'm not taking anything away from Tesla, it's still quite an accomplishment, but the comparison is simply not apples to apples.

---

On a side note, is there any data on the number of people who actually cross-shop the S-class and the Model S? I remember seeing something about one of the most popular previous cars for Model S owners is a Prius. I find it hard to believe that Prius owners are considering an S-class and choosing a Model S instead. It just seems like a different market and different segment of people. I know when you look at that table it looks like Tesla is stealing luxury market share, but isn't it possible that the luxury market is simply shrinking and Tesla is finding buyers from other segments?

It just seems like most people buy the Model S because it's the only long-range BEV out there, and for many, the only EV worth driving. I find it highly suspect that people are buying the Model S because it's a "luxury" car. Especially when you look at polls on this forum where people tell you this is the most expensive car they've ever purchased, or that they would have never spent anywhere near this kind of money on any other car. Those aren't "luxury" car buyers, but they seem representative of the typical Tesla owner.
 
J

jbcarioca

Guest
well, I was one of those people who compared those exact cars and chose a Model S...actually moving from a 7. I also included the S8 in that search too. In fact, I don't think that Im alone.
...So, from a pricing perspective, I could have easily purchased a very well appointed 7 or S class and there isn't a 5 series on the planet that expensive...not even sure if the M5 can reach that target.

My 7 series was a nightmare right from the start...
I'm guessing many of us have been in a similar spot. FWIW I speced an M5 as nearly the same as my loaded P85D and came up with the M5 at an MSRP of $135,152. I have no idea how to adjust for the 8 year drivetrain warranty nor the Superchargers, but with he MSRP that close it's hard to disagree with your basic point; price simply is not a relevant distinguishing factor when we compare Mode S or X with their equivalents in ICE.

It seems to me that, if the survey data are accurate, Tesla buyers engage quite a lot of people wo simply would never be in the market for a ICE equivalent, either due to cost or other factors. Notwithstanding Tesla outselling ICE comparable vehicles, we all probably would agree that Tesla also is vastly increasing the market for vehicles in the price class.

It is not strictly comparable but still is probably relevant that when VW bought Bentley and introduced the Continental and later the Flying Spur global and US car sales with MSRP about $150,000 suddenly more than doubled. Now there are many competitors but the Bentleys created a new segment. That is IMHO analogous because many people are spending more on Tesla's than they've ever spent on any other car. In addition, there are the slim majority of Tesla buyers, probably, who have spent that sort of money on cars and select the Tesla because they think it a better choice.

I am intrigued by the extent to which the Tesla phenomenon is actually expanding a market segment apart from the EV facts. What people like Bob Lutz miss is that change. What the fans among us must realize is that tesla is still a startup in automotive terms so has all the instability associated with that. Still, people are buying the vehicles regardless.

Probably I should realize that I myself have never advocated that anybody else buy a car that I bought. Now I find myself doing that most days. Oddly, I also find myself recommending Leaf, and several of my less-well-heeled acquaintances have bought Leaf's not to mention the others who have bought S's. As we consider what we would have bought, we might also think about how our recommendations to other people have changed.

Finally, I had horrible experiences with a Z1 (hardly surprising), an M5 and an M3 and finally gave up on BMW. Tesla has had zero difficult experiences, so I rather wonder if the excellent service might the affecting other owners as it has affected me. Part of that may well be about the dealership experience but...
 
I'm really shocked that we are still discussing if the Model S competes with the likes of the Mercedes S class. With both being 5 passenger 4 door sedans around the same price range and offering the best of what each manufacturer has to offer,

The best S Class the Mercedes offers is not at all in the same price range as the most expensive Tesla.

If you can afford an S Class, of course Tesla competes, so does the Prius, or a used Lexus, or a 7 Series.

Go look at the thread here about how much did your previous car cost.
http://www.teslamotorsclub.com/show...st-car-How-much-more-was-the-MS-than-that-car

I know it is just a forum poll, but still interesting how it supports the previous article I posted about the average Tesla buyer.

BTW, I think this is GOOD for Tesla. If Tesla is getting people to spend considerably more than their previous car, that means that they are playing in a much larger market than just competing in the 100k/units/year luxury segment.
 
benf: I agree with you on some Tesla buyers not looking at traditional luxury cars or for that matter Corvettes, etc. We bought our P90DL without a single consideration for any traditional "luxury" car or high performance ICE.. It is also true that we consider the Model S to be on whole better than any other car on the market in the general price range (something we want to afford). Maybe the facts lie somewhere between the chart and your assessment?
 

vgrinshpun

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Apr 5, 2013
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This thread went dormant some time ago, so I thought it would be interesting to have a follow-up to see whether Model S continue pillaging through the premium/luxury large sedan segment of US automotive market in 2016 after it did the same in 2015.
Yes, it does.

The results during the first nine month of 2016 might surprise a few skeptics:
  • Model S accelerated it's sales growth: sales during first 9 month of 2016 grew 58.26% as compared to the same period last year, vs 51.01% YoY in 2015
  • Sales of all competitors shrunk in first 9 month of 2016, with the exception of BMW Series 7, which enjoyed sales growth, but apparently at the expense of BMW Series 6. Combined growth of Series 6 and 7 was negative.
  • Model S gained a whopping additional 10% of market share, improving on stellar performance in 2015 when it commanded huge 25% of the segment.
  • All competitors seem to be helpless to stop Model S for the second year in a row. This might explain a slew of EV announcements on from the world's best automobile companies.
  • Tesla is poised to repeat this success in the compact premium/luxury segment with Model 3. This starts to look downright ominous to the European competitors. Developing new EVs to compete with Tesla will require substantial resources, while their income from the sales of traditional ICE vehicles takes huge hit due to Tesla's rapid market share advances
The data are from the Tesla Q4 2015 shareholder's letter, GOOD CAR BAD CAR (2014, 2015, 9 months 2015, 9 months 2016 sales for all manufacturers except Tesla), Monthly Plug-In Sales Scorecard (2015 9 months and 2016 9 months deliveries for Model S)

Snap1.png
 
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WannabeOwner

Well-Known Member
Nov 2, 2015
7,259
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Suffolk, UK
the 25,000(er 24,500) is Model S and Model X combined.

Thanks. I also now realise that I have confused myself by comparing the 24,500 Q3 sales, which are presumably "worldwide", with the analysis above which is "USA only"

Perhaps the X sales should also be included in the marque comparison of "large Luxury Cars", further increasing Tesla's pillaging?

Monthly Plug-In Sales Scorecard says 2016 Q1-Q3 (US only) Model S = 21,715, Model X = 12,740, so it ups the numbers by 50% overall :)
 

Saghost

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Oct 9, 2013
8,224
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Thanks. I also now realise that I have confused myself by comparing the 24,500 Q3 sales, which are presumably "worldwide", with the analysis above which is "USA only"

Perhaps the X sales should also be included in the marque comparison of "large Luxury Cars", further increasing Tesla's pillaging?

Monthly Plug-In Sales Scorecard says 2016 Q1-Q3 (US only) Model S = 21,715, Model X = 12,740, so it ups the numbers by 50% overall :)

But the X is presumably stealing from a different group of cars, which weren't in this list - Mercedes GL/GLE, BMW X5, Audi Q7, and maybe Cadillac Escalade. I don't think it makes sense to add all that here - and I think I've seen a matching X thread go by a couple times.
 
J

jbcarioca

Guest
But the X is presumably stealing from a different group of cars, which weren't in this list - Mercedes GL/GLE, BMW X5, Audi Q7, and maybe Cadillac Escalade. I don't think it makes sense to add all that here - and I think I've seen a matching X thread go by a couple times.
It will be quite useful to have peer-peer buying propensity data, since S,E,X,Y each have logical shopping comparison in ICE, PHEV, non-P-Hybrid and BEV. If not all today, all these will be common by two years from now, won't they.

By definition Tesla market share will decline from the present formidable positions but the BEV/PHEV market is exploding so Tesla sales will rise quickly. Strange that so many pundits discuss "Tesla killers". I completely agree with Elon on this; widespread adoption of EV's will benefit everyone including Tesla.
 
It'd be interesting to see a similar chart for the X. I think the luxury SUV segment (Mercedes G/GLx, BMW X5, Audi Q7 as mentioned above) is considerably larger so it will take some time for the X to make an impact. There are also more PHEV's already in that segment and more, along with BEV's, on the way.

I doubt we'll ever see anywhere near the same marketshare for the X but what happened with the S has certainly given every manufacturer enough anxiety to considerably hasten their EV plans.

Given the marketshare the S is taking in the large luxury segment, I'd not want to be trying to sell a used ICE in a year or two.
 
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