Tesla Model 3 Could Be The Next Toyota Camry
UNIVERSAL APPEAL: COULD TESLA MODEL 3 BE AS BIG A MASS MARKET HIT AS THE TOYOTA CAMRY?
For 14 years running, Toyota Camry has been America’s best-selling car.
That said, Loup Ventures compared the Model 3’s total cost of ownership with “the Toyota Camry because it’s a good example of an affordable quality car sold in the U.S. At first glance, Camry is in a different segment than the Model 3, given that a Camry costs an average of 42% less than an average Model 3 and Camry is an ICE (internal combustion engine). However, looking at total cost of ownership, the price gap closes based on savings from fuel, insurance maintenance, and repairs, ultimately yielding a 13% price difference over 5 years.”
*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman.
The Model 3’s lower cost of ownership could allow Tesla to tap into a bigger market than ever before. Munster concludes:
“Owning a Model 3 is only 13% more expensive than owning a Toyota Camry over a 5 year period…. [so] based on our cost of ownership work, we believe the Model 3 expands Tesla’s addressable market to about 11m vehicles per year in North America alone.” Could this mean mass market success for Tesla? “If Tesla captures 25% of this 11 million vehicle addressable market by 2025, Tesla would generate $105 billion in annual revenue from the Model 3.”
With a smaller-than-expected price difference, which car is the better value?
“Tesla wins over a Camry when it comes to customer experience, due to its acceleration, Autopilot, elimination of gas station stops, and the high-quality entertainment system. There is evidence of this in a Consumer Reports survey, where 91% of Tesla owners state they would ‘definitely’ buy their cars again, the highest rating of any automaker. The next two closest automakers were Porsche at 84% and Audi at 77%.”
Meanwhile, Toyota came in fifth place with 76%.
And don’t forget the viral nature of Tesla ownership:
“As more Teslas find their way onto the road, the general public will become increasingly aware of the benefits of Tesla ownership and likely view the 13% total cost of ownership difference as insignificant. We expect this ‘see it and want it’ phenomenon to cause an acceleration in Model 3 demand.” This, in turn, could open up the coveted Tesla brand to the masses. Munster predicts, “the Model 3’s value, in combination with its technology, has the potential to change the world and accelerate the adoption of electric and autonomous vehicles.”
As Tesla’s Autopilot is perfected, Big Auto will be left behind: “Detroit, Japan, and German car manufacturer feature shortfalls will compound around the end of 2020 when Tesla adds autonomy to approximately 2 million Teslas on the road virtually overnight… Note that every Tesla sold today has the hardware for full autonomy. When Tesla turns on full autonomy, we believe the market will tip away from traditional autos to Tesla.”
A trip down memory lane might be in order — perhaps Apple vs. Nokia could soon resemble Tesla vs. Toyota.
Above: Munster thinks Model 3 could be the iPhone of cars (YouTube: Bloomberg)
As before, Munster draws a corollary between Apple and Tesla. Apple, once seen as a niche pricey brand, now enjoys massive mainstream success. The iPhone was what pushed Apple out to a universal audience.
And Munster forecasts, “we will eventually look back at the launch of the Model 3 and compare it to the iPhone, which proved to be the catalyst for the shift to mobile computing… Looking back at the iPhone in 2007 it was a stretch to envision the company producing 50m phones a year, but in 2015, the company sold 232m units.”
*Source: Loup Ventures
*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.