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Published on January 28th, 2019 | by Vijay Govindan

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Tesla Model 3 = #1 Best Selling Car In USA In Terms Of Revenue (4th Quarter 2018)

January 28th, 2019 by  


I recently saw this tweet in response to Zach’s 30 Nasty Tesla Charts article. Thanks to @martinengwicht and @elonmuskscience for bringing it to my attention. The tweet highlights that “price seems to be totally uncorrelated to sales numbers” in the US car market these days, because of special interest in the Tesla Model 3. To follow up on this, Zach asked me to create a revenue comparison between the Tesla Model 3 and other top selling cars in the US. The chart from @elonmuskscience in that tweet noted above gave me a great starting point. Thanks!

Let me preface things by saying I am aware that Tesla Model 3 sales in the USA cannot maintain the pace of sales into 2019 as they had in the second half of 2018. The tax credit already got cut in half, with more reductions coming. The Model 3 will be shipped to customers in Europe and China this year as well. Tesla exclusively sold the Long Range and Performance trims for much of the year. The Standard Range, on the other hand, will be introduced in 2019, pulling down average selling prices for the Model 3.

That does not diminish what Tesla has achieved, though. What Tesla has done with the Model 3 is it has upended the existing Midsize Luxury Car segment in 18 months. This is a cutthroat industry, so let’s give credit to Tesla and the Model 3. Before moving onto 2019, though, I would like to offer my take on how the Model 3 did in the USA in 2018, alongside a new analysis and several charts.

First of all, how did the Model 3 do against cars in the small and midsize luxury segments in terms of revenue?

The Model 3 sold 2.3× more vehicles than its top competitor, Mercedes C-Class. That is 230% more vehicles.

The Model 3 had 19.7% market share for all of 2018. The Mercedes C-Class had 8.5% market share, ranking in a distant second place.

The Model 3 soaked up almost 20% of all money spent on small & midsize luxury cars in 2018. It ended December with close to 30% share of total revenue. The Mercedes E/CLS-Class was the 2018 runner-up, with 10% of total small & midsize luxury car revenue. This is astonishing.

Note: To calculate revenue by model, I used the average of the lowest sales price I could find and the largest, most highly optioned version of the vehicle I could configure for each model.

Exactly how much did the Model 3 dominate competitors? The Model 3 ranged from 2.1× more revenue than the Mercedes E-Class all the way to 68.7× more revenue than the Acura RLX.

Remember, this comparison includes the likes of Mercedes-Benz, BMW, Lexus, Infiniti, and Audi. These are major competitors, with numerous dealerships, well-trained salespeople, larger financial clout, and storied brands. The Model 3 beat them all.

 


 

How did the Model 3 do against the top 5 competitors on the overall car market?

In December, Model 3 was #1 against higher volume but cheaper competitors, based on my estimates. The Model 3 gave competitors in an entirely different, smaller, cheaper class a run for the money — and stole the lead.

Yup, Model 3 was #1 in the 4th quarter of 2018 as well. And while my estimates are surely not 100% accurate, a difference of approximately $1 billion gives the Model 3 a safe cushion. It was clearly the top selling car of the 4th quarter (and 3rd quarter) in terms of revenue.

For all of 2018, the Model 3 is handicapped by the relatively low number of units produced in the first half. The end result for the Model 3 was still impressive at #4, and keep in mind the competition includes all sedans, not just small and medium luxury sedans. Additionally, as you can see in the following chart, the difference between the Model 3 and the #2 Honda Accord and #3 Honda Civic is not very large. The Toyota Camry, though, retained a solid hold on #1.

For a little more qualitative context, here are some quotes from competitors regarding Tesla:

Cadillac President Steve Carlisle said he “obsessively” benchmarks and studies Tesla. “They have done a lot to popularize electric vehicles and to get into the minds of consumers,” Carlisle admits.

Toyota’s North American CEO, Jim Lentz, also confessed that Tesla is having an impact on Prius sales. Lentz said: “(Musk) is creating an entirely new segment of vehicles … and by that, I don’t view Tesla products as luxury products. Those of us who only separate the world between luxury and non-luxury, we’re missing the point. Tesla has created this new category of a technology-driven product.”

The industry should ask itself three questions. All three lead to not such good answers:

  1. What happens to demand when the Model 3 Standard Range is introduced?
  2. What happens when Gigafactory 3 comes online and sells to China and Asia?
  3. What in the world will happen when the Model Y is in more demand than the Model 3?

I am excited what the Model 3 can do with worldwide sales. Here’s to more success for Elon and Tesla in 2019! I hope the competition brings their AA+ game. They will need it to compete. 
 
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About the Author

Vijay Govindan is a Cleantechnica writer part-time. Through his writing Vijay seeks to elevate the realized potential of humankind. Against human trafficking. Tesla Model 3 LR owner. His claim to fame is Tesla and Elon have commented, liked or re-tweeted an article he wrote with the Tesla community. Just once. ;) https://cleantechnica.com/2019/06/23/our-new-tesla-myths-page/ #WeChooseTesla, #RenewableEnergy and #YangGang supporter. Long Tesla shares. Has a healthy skepticism of the Q branch of the Tesla investment community. Made it to one $tslaq block list. Follow him on Twitter @vijaygovindan17. If you read this far, wow, 👏🏽 and 🙏🏽.



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