Model S Decimates Large Premium/Luxury Car Market

[FlatSix911]

Yep, there is many reasons the model S is destroying the German competition, and value is one of them. The large German luxobarges have some of the sharpest depreciation of any car you can buy, losing 40%+ of their value after 50,000 miles compared with 28% for the model S. Factor in "fuel" costing 3-4 times as much, and the total cost of ownership for a $140,000 top-of-the-line P100D could cost less than the entry-ish level $95K Mercedes S-Class or BMW 7 series.

it's no wonder Tesla is eating BMW/Audi/MBs lunch... Coupled with the fact that people finally seem to be waking up to the fact that "German engineering" is overrated and their cars turn into total shop queens after ~75,000 miles, and European cannot do electronic to save their lives, I think there is an existential crisis in the works for Deutschland.

I agree 100% with your analysis and found another article to back it up with data ...
Tesla increases its lead on the US luxury sedan market, beating Mercedes, BMW and Audi

Tesla shocked the industry earlier this year when it confirmed having delivered 25,202 Model S sedans in the U.S. in 2015, which gave the company a 25% market share in the premium sedan market. For the first time, Tesla had surpassed market leaders like BMW and Mercedes. Furthermore, every single other large luxury sedan has seen its sales decrease during the same period.
Now the electric automaker is increasing its lead on the US luxury sedan market to such a point that the Model S is now twice as popular as the Mercedes S-Class or the BMW 7-Series. Tesla is literally selling more all-electric sedans in the US than Mercedes and BMW are selling S-Class and 7-Series combined. That’s based on data obtained by IHS Markit during the third quarter 2016.
Tesla announced its delivery numbers earlier this month for the third quarter 2016 and confirmed that it delivered a record-breaking number of vehicles: 24,500: Model S: 15,800 Model X: 8,700. Those numbers are global deliveries as Tesla doesn’t breakdown deliveries per market, but IHS looked into registrations and came up with this chart for US sales during Q3 2016

 

[Spidy]

There is a long discussion about the article on Reddit: Tesla increases its lead on the US luxury sedan market, beating Mercedes, BMW and Audi • /r/teslamotors

 

[TJ&TheBeast]

I agree with the commenters that generally, the Model S is growing the luxury pie versus taking shares from existing automakers.

You can add me as a data point that the Tesla Model S brought me to the "large luxury sedan" market but not as someone who would have consider a 7-series or S-class ICE. Those sedans are too big for my needs and wants. 3 months in, the Tesla has satisfied all my needs as an performance luxury sedan replacement (2007 M5) plus the added bonus of not having to deal with poor service and attitude at BMW dealerships.

 

[sandpiper]

100% for sure, Tesla grew the market for high priced vehicles. I fit the same category. I'd never bought a car over $45,000 before the Model S.

Although... I rather suspect this might be a one time deal for a lot of folks, and for me as well. A lot of people made the reach for a Tesla because they saw some intrinsic value in the machine and the company beyond the luxo-frippery and status that you pay for in a normal 100K+ car.

Once Teslas and EVs become more mainstream and cheaper, I expect that you'll see a lot of the Tesla buyers return to more reasonably priced cars, made by Tesla and others.

 

[Saghost]

I agree with the commenters that generally, the Model S is growing the luxury pie versus taking shares from existing automakers.

You can add me as a data point that the Tesla Model S brought me to the "large luxury sedan" market but not as someone who would have consider a 7-series or S-class ICE. Those sedans are too big for my needs and wants. 3 months in, the Tesla has satisfied all my needs as an performance luxury sedan replacement (2007 M5) plus the added bonus of not having to deal with poor service and attitude at BMW dealerships.

From what I see and read, they're doing both.

I'm certainly on your side of the equation - there's no way I would have spent this kind of money on any other car, and I'm still not 100% comfortable with it.

On the other hand, there is plenty of data here, both statistical and from various posts describing personal situations, to demonstrate that they are pulling a lot of buyers who could buy most any car and often do buy in the S/7/A8 category.

 

[NewJerseyMS]

I was looking at Audi RS7 versus P90D (which ultimately became P100D). The comparison was over almost as soon as it started as one Audi dealer had no RS7 and another had a few but I couldn't drive them. The Audi shopping experience was so bad I can't believe it.

 

[Xminus6]

100% for sure, Tesla grew the market for high priced vehicles. I fit the same category. I'd never bought a car over $45,000 before the Model S.

Although... I rather suspect this might be a one time deal for a lot of folks, and for me as well. A lot of people made the reach for a Tesla because they saw some intrinsic value in the machine and the company beyond the luxo-frippery and status that you pay for in a normal 100K+ car.

Once Teslas and EVs become more mainstream and cheaper, I expect that you'll see a lot of the Tesla buyers return to more reasonably priced cars, made by Tesla and others.

That's a good point. Right now the only sedan that can travel over 200 miles on a charge is the Model S. For a lot of people buying EVs, range is the determining factor for purchase, not the relative luxury. Once the Model 3 comes online, a lot of people will probably buy down from the Model S.

I'm sort of in that group. I'm likely going to order a Model X to replace our S this week. Then when the lease runs out on our Toyota RAV4 EV, we'll replace that with one of the Model 3 reservations that we hold. The main reason I'm going into an X is for the extra seating capacity. I can get rid of our "people" car that we own outright and the equity in our Model S and keep the payments the same as our '14 S and take some cash out.

We could certainly afford a P model of the X but it just seems unnecessary for me if I'm honest with myself about my driving patterns. While I've enjoyed having fast cars in the past, I can't justify the price delta between a regular 90D (or 100D if available) and a PL version of the same vehicle. The price difference is nearly a whole Model 3.

I might be tempted to get a PL version of the 3 though if the price isn't crazy high.

 

[ZachF]

I was looking at Audi RS7 versus P90D (which ultimately became P100D). The comparison was over almost as soon as it started as one Audi dealer had no RS7 and another had a few but I couldn't drive them. The Audi shopping experience was so bad I can't believe it.

You're future-bizzaro self will probably cross dimensions to thank you when that Audi's CPU acts like it's haunted and the car starts to fall apart around you, spending the majority of it's time being wrenched on...

There's a reason most luxury German car owners lease, or ditch their cars as soon as the warranty is up. Owning a German car past 60,000 miles is an exercise in masochism...

 

[FlatSix911]

Interesting reading ... http://www.bizjournals.com/sanjose/...aims-it-now-owns-nearly-a-third-of-the-u.html

Palo Alto-based Tesla this week released internal sales numbers and competitive data that claim the company’s Model S outsold every other car in the large luxury sedan market in the U.S. in the third quarter. The sales chart, published by Bloomberg, shows the company sold 9,156 Tesla Model S’s in the third quarter, a 59 percent jump over the car’s sales figures during the same time period last year. Notably, Tesla compared the sales performance of the Model S against 11 other car models, made by Mercedes-Benz, BMW, Maserati, Audi, Lexus, Porsche and Jaguar. They did not benchmark against sales of large luxury sedans made by Cadillac, Kia, Acura, Hyundai, Lincoln, Volvo, and other cars the Model S is commonly compared to.

That said, the internal report is notable for understanding who Tesla compares itself to, and how they feel they’re doing in the market. Its closest competitor on the list, the Mercedes-Benz S-Class, has a starting price of $96,600 and sold 4,921 cars in the third quarter. That’s followed by the BMW 7-Series (starting price of $81,500), which sold 3,634 cars in the third quarter, Tesla says. The Model S has a lower starting price of $66,000 before a package of incentives that places in the actual cost of the car’s base model in the $50,000 to $60,000 range.

 

[vgrinshpun]

Here is much more interesting (IMHO) reading, including data for Large Luxury Segment in US going back to 2002, as well as Model S data since it's launch in 2012.

The data and charts are here. Additional discussion here.

 

[ZachF]

I agree with the commenters that generally, the Model S is growing the luxury pie versus taking shares from existing automakers.

You can add me as a data point that the Tesla Model S brought me to the "large luxury sedan" market but not as someone who would have consider a 7-series or S-class ICE. Those sedans are too big for my needs and wants. 3 months in, the Tesla has satisfied all my needs as an performance luxury sedan replacement (2007 M5) plus the added bonus of not having to deal with poor service and attitude at BMW dealerships.

I dunno... If you take all the models compared against the S in the sales chart, and use Good Car bad Car data going back to 2002 you get a "peak" in sales for the class of around 100k units/year when the economy is doing well. It seems pretty clear to me that Tesla is eating into the sales of it's rivals big time.

(note: 2016 data is 9 months YTD sales annualized for comparison's sake)
Broken down by manufacturer

 

[Saghost]

I dunno... If you take all the models compared against the S in the sales chart, and use Good Car bad Car data going back to 2002 you get a "peak" in sales for the class of around 100k units/year when the economy is doing well. It seems pretty clear to me that Tesla is eating into the sales of it's rivals big time.

(note: 2016 data is 9 months YTD sales annualized for comparison's sake)
Broken down by manufacturer
View attachment 198934

It took me a bit to figure out what you were trying to show us, despite the clear labeling - because I've never seen a chart with newest dates to the left like that.

 

[Chopr147]

Count me as a convert.
My plan was to buy a BMW 535i in 2017 or 2018 depending on how my Yukon XL held up. That was my family car of course but my youngest is now 15 and I no longer need the guzzler.
Then the Model 3 gala happened March 31st. A friend told me to check it out the morning of April 1st and 1 hour later I had a reservation in. I knew about Tesla and loved the S but figured it is out of my league. And the BMW is a drivers car which is what I wanted.
Fast-forward to June and I took a test drive. 3 days later I ordered my S I could not put it off any longer! Kept the Model 3 reservation of course. I'll wait and see on that
I am a Tesla driver because it is a great car. This Elon knew was the only way to sell EV's and he succeeded.

 

[Chopr147]

Funny thing happened on the way to my Tesla. I became a fan and applaud the sales like it's the Yankees
Tesla hat, shirt, coffee cups and of course a car
At times I need to step back and give an objective opinion here rather than a fanboy but an American car company making the best damn car? It's been a while since I could say that

 

[Brando]

Seems Model S has about 60% market share? in 2018.

https://cleantechnica.com/files/2019/05/Best-Selling-Large-Luxury-Cars-USA-2018.png

chart is from this article:
13 Amazing Tesla Sales Milestones (+ 17 Charts) | CleanTechnica

Seems Audi A7 and BMW 8 Series should be added.
BMW 8 series 225 (~900 in 2019 thru April)
Audi A7 3, 852 (~2,200 in 2019 thru April)

Model S would still be ~55% for 2018.

Can Model S hit 50% for 2019? That would still be out standing.

seems good source:
http://carsalesbase.com/us-car-sales-data/

 

[FlatSix911]

Seems Model S has about 60% market share? in 2018.
https://cleantechnica.com/files/2019/05/Best-Selling-Large-Luxury-Cars-USA-2018.png
chart is from this article: 13 Amazing Tesla Sales Milestones (+ 17 Charts) | CleanTechnica
Seems Audi A7 and BMW 8 Series should be added.
BMW 8 series 225 (~900 in 2019 thru April)
Audi A7 3, 852 (~2,200 in 2019 thru April)
Model S would still be ~55% for 2018.
Can Model S hit 50% for 2019? That would still be out standing.
seems a good source: http://carsalesbase.com/us-car-sales-data/

Very interesting... Tesla should report similar results and continue the trend for 1H 2019.

 

[whitex]

Very interesting... Tesla should report similar results and continue the trend for 1H 2019.

2019 Sales of Model S and X will be less than 2018, so they'll be giving up part of the luxury market. To be fair, they grew the luxury market in last few years, by having EV enthusiast having no other option but luxury car. With Model 3 available, the luxury market will shrink back. That, and competing EV cars like Audi, Porsche, etc are going to hit that market too.

 

[CarlK]

2019 Sales of Model S and X will be less than 2018, so they'll be giving up part of the luxury market. To be fair, they grew the luxury market in last few years, by having EV enthusiast having no other option but luxury car. With Model 3 available, the luxury market will shrink back. That, and competing EV cars like Audi, Porsche, etc are going to hit that market too.

But the effect of Model 3 should have already been seen in 2018 sales. The levers pulled and to be pulled this year could move S/X sales up too.

As for competing EV cars I think it mostly reflects wider acceptance of EV. It's not a zero sum game.

 

[whitex]

But the effect of Model 3 should have already been seen in 2018 sales. The levers pulled and to be pulled this year could move S/X sales up too.

As for competing EV cars I think it mostly reflects wider acceptance of EV. It's not a zero sum game.

Model 3 didn't ramp up production and become widely available until late in the year, so the full effect won't be seen until this year. The price drops and other lever will definitely help, but those are temporary. Only time will tell.

PS> The levers right now are amazing, I could pick up a brand new P100DL cheaper than my P85D was. I won't do that, for reasons left for other threads, but I was really tempted (for about 2 minutes, then I remembered why I don't want to buy any more new Teslas).

 

[CarlK]

Model 3 didn't ramp up production and become widely available until late in the year, so the full effect won't be seen until this year. The price drops and other lever will definitely help, but those are temporary. Only time will tell.

PS> The levers right now are amazing, I could pick up a brand new P100DL cheaper than my P85D was. I won't do that, for reasons left for other threads, but I was really tempted (for about 2 minutes, then I remembered why I don't want to buy any more new Teslas).

People who wanted their next car to be a Model 3 would not buy the Model S in 18'. The Osborne effect should be felt when details of the Model 3 is known. There are a lot things separate S and 3. Range, performance, size and very importantly the exclusivity. People who could afford to buy a higher level car do prefer not to see several similar ones at every stop light.

I was very tempted of the P100DL deal too. I'd have pulled the trigger if not that I'm still waiting for the Roadster.