It’s safer than a Volvo, greener than a Prius, sportier than a BMW, more practical than a Honda, and possibly even more prestigious than a Jaguar*. The Tesla Model 3 is in a league of its own, and its sales demonstrate that.
How the heck do you beat several top automakers at the features they are best known for? Well, you start with a fully electric drivetrain, lead on battery & software development, and design the car with a fresh, ground-up approach that is focused on what consumers would like — not just what they’re used to.
On Tesla’s quarterly shareholder conference call yesterday, CEO Elon Musk noted that the top 5 cars people were trading in when they got their Model 3s were the Toyota Prius, BMW 3 Series, Honda Accord, Honda Civic, and Nissan LEAF.
I asked Musk if he could share more info on what percentage of buyers were trading in each of those models and if he could provide any extra information on the range of vehicles Model 3 buyers were trading in. I’ve heard from people who previously drove a pickup truck, a sports car, larger luxury cars, and some of the models on that top 5 list, but I and many others are very curious to know what the full picture looks like — and how it will change over time as more Model 3s get into the hands of buyers.
Unfortunately, Musk indicated he didn’t know any details beyond the list they shared. He had apparently just asked someone to pull up the data right before the call.
So, that leads us back to speculation — which is always fun but often not accurate. It’s clear just from looking at the top 5 models traded in that the Model 3 is pulling in buyers who care about efficiency, sporty driving, and practicality. It’s also clear that that means the Model 3 is competing in multiple car classes all at once. It’s not just competing against small & midsize luxury cars, but is actually, to some extent or another, competing against every other car out there that isn’t in the higher Model S class. (It’s also competing against the Model S, of course, but it doesn’t seem to be cannibalizing sales at all and may even be increasing them due to the awareness the car is bringing to the brand.)
One way to put it is that the Model 3 is competing in every car class. Another way to put it is that it’s in a class of its own. It is indeed the only premium-quality electric car that has long range, superfast charging, and a price under $50,000. That is a basic combo that consumers strongly desire. Add in the extremely sporty driving, the market-leading Autopilot suite, and the beautiful design, each of which pull in more consumer groups.
I’ve already compared Tesla Model 3 sales to the sales of other small or midsize luxury cars (and I’ll try to publish an update this weekend), I’ll be publishing our monthly electric car sales report shortly, and I wrote up a piece on Toyota’s declining Camry & Prius sales yesterday just before the Tesla conference call. However, given the Model 3’s broad appeal and the top 5 cars buyers are trading in, I was titillated enough to explore the sales of the market’s top selling cars immediately. Here we go …
Overall, as we predicted in previous months, it appears that the Tesla Model 3 was the 7th or 8th best selling car in the United States in July. We don’t have precise figures from Tesla, but it appears from graphical information released by Tesla yesterday that deliveries were in the 13,000–15,000 unit range. That would put it either above or below the Hyundai Elantra in the list of top selling cars in the USA. In August, sales (i.e., deliveries) should be even higher, potentially moving it into the 6th or optimistically 5th position.
In the 5th position, it would trail only the Toyota Corolla, Toyota Camry, Honda Civic, and Honda Accord. With the Civic and Accord being two of the top 5 models Model 3 buyers are trading in, it seemed like an imperative to go have a look at how those models’ July 2018 sales compared to July 2017 sales. To round out the top 11, we’ll also take a look at sales of the Nissan Sentra, Nissan Altima, Hyundai Elantra, Hyundai Sonata, Kia Optima, and Ford Fusion.
|Tesla Model 3
*Full credit to Paul Fosse for eloquently noting to me that his Model 3 is practical like a Honda Accord, sporty like a Porsche, prestigious like a Jaguar, green like a Prius, safe like a Volvo. Okay, full credit goes to Tesla for creating the car, but Paul definitely deserves some credit for the insightful and poignant summary as well.