Despite Struggles, Tesla Steals Market Share From Rivals

Tesla Model 3

DEC 3 2017 BY EVANNEX 60

Tesla

Tesla’s Model S (Image: EVANNEX)

With the Model 3 slowly but surely rolling off Tesla’s assembly line, many are pondering the impact that the revolutionary EV is likely to have on the overall auto market. Will Model 3 take market share away from popular mid-size luxury sedans? Any crystal ball-gazer wishing to answer that question will surely start by looking at how Model S has fared vis a vis legacy models in its class.

Regular visitors to this space already know that Model S has dominated the large luxury segment for some time now. However, a new infographic from the UK firm Select Car Leasing (via ValueWalk) adds some details to that picture.

This infographic compares the sales of Model S to those of “competing” sedans from Audi, BMW, Mercedes and Jaguar. The electric trendsetter’s share of this segment has grown rapidly, from almost nothing in 2013 to 35% in 2016.

Upstart Tesla is stealing a lot of sales from these venerable European brands. Of the seven fossil models compared here, only one – the BMW 7 Series – saw its sales grow in the period 2014-2016. The rest posted substantial losses, while Model S sales soared by 43%.

A chart of year-on-year sales for 2013-2016 also makes for some interesting reading (see below). Other than the BMW 7 Series and the Mercedes S Class, the legacy models show clear downward trends, while Tesla’s numbers are spiking ever upwards.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris.

Tesla

A look at both the Model X and Model S (Image: EVANNEX)

Of course, not only is Tesla beating gas-powered sedans in its class, it has also dominated the overall electric vehicle market – so far in 2017, Model S holds the top spot in US sales.

Another interesting trend – and one often overlooked by the prophets of doom emboldened by TSLA’s recent stock price decline – is that the company’s revenue has steadily accelerated, from $14 million in 2008 to $7 billion in 2016. No, that healthy revenue has not translated into profits – Tesla has plowed every cent of its revenue, and then some, into developing new products, and the quarterly losses seem certain to continue at least until Model 3 reaches full production mode.

And we’ll have to wait for that glad day before we have an answer to the question posed above. Model 3 may have over 400,000 pre-orders on the books, but until Tesla starts delivering substantial numbers of vehicles, we won’t know if the new model will emulate its father’s feats of market share conquest.

However, several industry observers have already published detailed comparisons between Model 3 and so-called competing models, and reading these, the inevitable conclusion is that the real question is not if, but when.

Infographic

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*Source: Select Car Leasing (via ValueWalk)

*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.

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60 Comments on "Despite Struggles, Tesla Steals Market Share From Rivals"

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BMW 7 series has sales increase? Who’s buying them, and why?

Friends of Danial Pinkwater? (funniest episode ever).
https://www.cartalk.com/content/1432-pinkwater-and-bmw-owners-manual

All of the competing models had their peak years between 2000-2005 and are declining ever since, long before Tesla was around. I think it is overly simplistic to credit Tesla with it.

The model 3 will be interesting, because there are only so many buyers with that kind of money, it will serve in many cases as only car and therefore will directly displace a sale from ICE models, possibly even lower end models.

2005 “peak” was because of recession starting about 2007. But if you consider overall sales since 2013, Tesla share of the pie would’ve gone to others.

Now if total sales of all comparable cars including Tesla have been shrinking since 2013, you may have a point. But the fact that Tesla is taking more and more percent while total sales of all comparable cars increased means people who would’ve bought those gassers bought Tesla instead.

Yes, Model S replaced at least some in the US. But there is something else going on in the US which is not mirrored in the world. Pretty much all those models are up globally or at least flat in other “mature” markets.

US has the best supercharger coverage, so it’s no surprise US is different. But as you say, other markets are growing, so if they had similar supercharger network, I suspect Tesla will take away market share from those markets as well.

Speaking of, every time some legacy carmaker (like Jaguar) talk about Tesla as just a car company, they completely miss the point. Tesla with supercharger network is more than just cars.

Plus SUV and CUV are king in the US. All sedans have been losing market share to the these beast

This is probably due significantly to the relentless (until it stops) shift from luxury cars to luxury SUVs.

Still, Tesla’s success is impressive and this sector of the car market will be less effected by the end of tax credits than the mass market part.

It will be interesting to see how the legacy companies do versus Tesla when they finally bring their EVs to market.

Luxury goods in all categories, not just cars, are growing very rapidly. This development is simply driven by welth generation and concentration, which is a global megatrend.

Tesla may not have the advantage of the legacy auto makers lack of EV options to compete against for the Model 3 the way they had for the Model S/X.

-119% form the bmw 6 series seems a little odd to me. How can you loose more than 100%?

So many people seem to struggle with simple statistics.

I was wondering the same thing. The chart is labeled “% change in sales”; how can sales drop by more than 100%?

I guess the chart is mis-labeled and does not actually show total market share. The problem is we have no idea what it does show, so IMHO it’s meaningless.

Actually they are ALL calculated wrong. Every single one of them. Took me a bit to even duplicate the error. I think I will use this as an example of how one does bad descriptive statistics in class. ‘percent of what’ is a common question I ask. Always always be suspicious of these types of graphs. The error is in the direction of the calculation and what is used as denominator. The comparison is 2014 to 2016. Those sales numbers are 8647 and 3947 respectively. That’s a drop of 4700. So the DROP is 4700/8647 or 54%. The author instead divided by the end number 3947. Now if you started at 3947 and sales increased to 8647 you in fact would get 119% growth. If you do this to every number in that chart you will find every one of them calculated incorrectly. Perhaps someone could suggest they edit their infographic to be more….correct.

By the way this is a personal pet peeve of mine. I get exhausted seeing article that will claim goofy stuff like ‘it’s 4 times less than before’ when what they mean is an 80% drop. Innumeracy is a pox upon humanity.

I realize I’m having a conversation with myself but the core point of the article is still valid. Model S/X have taken a pretty good market share but growth (if any) from here will be constrained by the limitations of the total opportunity size in the high end market. Model 3 then is best judged against market share for the BMW 3 series and 5 series classes of vehicles (Audi A4/A6)

You forgot Mercedes Benz (no, I don’t know which models are comparable to the Model 3). And Thank You for having an informative fact based discussion with yourself. I learned something!

I share you ur frustration and appreciate you getting to the bottom of the shoddy statistical calculations here. You saved me some time.

+1 Good math. Your numbers are a 200% increase in accuracy over the original numbers. They are like twice as accurate…

*grin* *see what I did there?*

Yes I do. Not half bad.

Nice sleuthing, Tom.
The numerous typographical errors and design inconsistencies of the graphic had me suspecting some ramshackle math being behind not only the one obviously incorrect figure but the charts as a whole. You also do well to point out that the failures of the graphics don’t deny what it intended to show.

Every time I see an infographic, I just assume it was done by some innumerate marketing intern and nobody bothered caring about the numbers as long as the color schemes were nice.

I think we have to be careful looking at the drop in competitors sedans as correlation and causation. This total ignores the rise of CUV’s and SUV’s that are eating into sedan sales. Looking at just the info graphic you would assume BMW vehicle sales are decreasing at an alarming rate, but they aren’t. They are just buying other vehicle types.

+

Right. They are buying Tesla Model S or X, a different type of vehicle. Because it’s a better vehicle.

Yeh they buying suvs. Sorry to say that

GO TESLA GO DESTROY DIRTY GAS GUZZLERS LOL

When something fires the imagination of the public as Tesla has there is no stopping it. Like the Mustang, which was really not that good, or the Corvette, which was much better, they became phenomenal successes, which is what is happening with all Tesla Models.

A reverse example would be the Edsel, which though it had problems, it undeservedly became synonymous with failure.
A gaudy dream that turned into a nightmare.

“A reverse example would be the Edsel, which though it had problems, it undeservedly became synonymous with failure.”

No, I think the Edsel’s reputation is deserved. Ford ignored the reality that during an economic downturn, car buyers prefer to buy lower cost, fuel efficient cars. Ford thought it could succeed in “swimming upstream” against the economic trend by heavily promoting a luxury car when people wanted economy cars.

There were other factors contributing to the Edsel’s failure, such as the push-button gearshift, which was poorly implemented and prone to mechanical failure. But the primary reason for the Edsel becoming a money-loser for Ford was ignoring what the market wanted at that time.

Tech stocks fired the imagination of the public in the late 90s. That worked, until it didn’t.

Yep that internet thing turned out to just be a fad and nobody made any money on it.

Not a reverse example at all. The Edsel was a “technically advanced car” that operated its transmission with push buttons. Apparently the public didn’t want anything that “new tech”.

That doesn’t parallel anything we know about, now does it?

Have you seen an Edsel? It’s sales could be simply explained by it’s looks.

The problem with this argument is that the stock is still a bad buy. Sure, Tesla grows into being an established auto manufacturer and in doing so displaces a small amount of other manufacturer’s sales.

But, so what? It’s already priced into the stock since it’s market cap is already in the same ballpark as Ford and GM. Even if Tesla is extremely successful your investment return ends up being nil.

There’s no way to make a logical argument for investing in Tesla stock at this point. You can bet on absurd outcomes, like Tesla taking half of worldwide auto market share, but anyone who believes something like that honestly deserves to lose their money.

Tesla is not simply a car company, and that’s reflected in their valuation. I’m not sure comparing them to other car companies is particularly relevant.

You are right, they bailed out Solar city in a family deal and diluted their shareholders, and are wildly distracted with Puerto Rico, more future projects etc.. One day, when Musk’s rich investor partners Ever have enough of the Bonfire cash incineration fumes (unknown if this will actually ever happen), then and only then will TSLA stock be in trouble (Shorters should have learned this over the last 5 years from the holes in their bank accts). All that matters is innovation and future promises and demos, Because that’s all the investors care about. Wake up and watch the Bitcoin, Google/Facebook, housing, and dotcom cycles. When Model 3 Wait List = 0 (demand dries up in LA/California) is the time to worry, if they can’t turn a profit by then.

Developing new vehicles and building the infrastructure to get there is not “burning” cash, it’s investing in the future.

It IS Burning Cash, until actual production comes out (which the Model 3 is having Severe problems attaining), AND Even then there Should be Profit (if Investors so judge and demand it), at least REPLACING that Burned cash, Hence it Wasn’t NET burned.
Take some Acctg classes, and stay out the emotional marketing semantics / Spin (I know it’s hard when it’s spewed by leader Musk).

You should consider stepping away from the hateraid. People are investing in the future, not the present. You should realize that, if you’ve invested time in your own suggestion.

Whatever, man, they are Burning Cash, Period.
Investing for future or present should mean to actually succeed in making the product And if investors ask for their money back and a return, then you need to make a profit (at least for ONE quarter as Musk did in Q1 2013 by pillaging staff/investment to entice more investor funds (as in dropping staff months ago)).
They will make the product (Model 3) and it will succeed engineering-wise. When LA/California demand and waiting list = 0 (bored, moved on, Flatline growth like now for Model S & X) is the question, and should be major determinant of TSLA stock going fwd.

Man, they make several products. They have been slow to ramp on one of their vehicles. Whether they succeed long-term or not hasn’t been decided, but people are investing in the expectation that they will be profitable years from now. So, there’s really no need to get hung up on the present.

The Model 3 is a global vehicle. I’ve got a reservation, and live nowhere near CA. I also lease and X, and will likely lease another one.

They have done well so far. It is the long term. Will see when/if Model 3 Waiting List And buzz last, esp in California, and if they can prove it turns a profit, if investors so demand. Demand and Pricing marketing study test for 2018.

Mystery mumbled “Investing for future or present should mean to actually succeed in making the product ” Show me were you successfully predicted in 2012 when the Model S was still struggling to launch that Tesla would build and deliver over a quarter of a million Model S+X cars globally by Q3 2017, and then we can discuss your ability to predict Tesla’s long term success at building cars. The reality is that folks who talk just like you have utterly FAILED at accurately predicting Tesla’s sales. Folks like you said they would either never build any, or would build only a few thousand to fill the few reservations that only a few reservation holders would finalize. Then fold the factory doors. Now we hear the same noise, from the same type of folks who recycle the same arguments used in 2012. Frankly, Tesla has REPEATEDLY outperformed in the long term even the typical Tesla fan’s expectations. None of us here predicted 400K Model 3 reservations. We were way low. The reality is that if you take the median of Tesla fan expectations, that has historically been well below the floor of actual Tesla performance. That’s the reality. And it… Read more »

Legecy automakers eat 400k in sales a year like toyota camary or honda accord, can tesla sell 400k after reserv9. We will see

Please, not that silly meme again about sales ending when the initial reservations have all been filled.

Folks like you tried that silly meme for both the Model S and the Model X. Wrong both times. So badly wrong that it isn’t even funny.

So why do you believe that magically after that meme being absolutely wrong twice in a row, that it will magically be correct this time? Because going by historical results, 400K reservations will once again be only a fraction of total sales in 5 years. Just like the original 12,000 Model S reservations are a fraction of total sales 5 years later.

Can you point to ANY time you nutters actually got the long term production number estimates right? Anywhere that any of you nutters correctly predicted a quarter of a million Model S+X sales total by Q3 2017?

You are practicing Musk level of misdirection (changigfn the subject) Again. I said Model s was a success BUT the fact is Peak Model S was reached months ago, so it’s Flatline or downward % sales from here. That doesn’t mean No sales (means no growth and no waiting list). If Model 3 in california Waiting List evaporates in 6-12 mos after non-NDA-gagged employee sales stop, then Demand side, future profitability, and if investors do deem – survival of TSLA as a company, will likely Suffer. This is Something you CAN Peg to your board instead of Outlandish TL;DR gibberish make-believe vaporware.

400k is demand but afterwards its the issue can they maintain 400k sales a year when the 3 is not marketed to the masses and not everyone is on board on electrics. Plus most of these reserve are fanbois and expecteing tesla buyers and people that want a piece of the pie

“If Model Demand = 0”, is what so many people said about the little 12,000 Reservations for the Model S! Same thing for the 20,000 Reservations for the Model X! Seems like they got More Orders for the S & the X, when demand rose for the Model 3: some of that interest did, in fact, spill over to sales of the S & X!

Roadster Excitement, leads to the Same or Similar things, again, besides the new toys, that just brings people back to the foundation products!

Yeah for 1 or 2 days after Model 3 reveal, then Pinocchio-touted as extrapolating in an exponential curve to continue forever…Not. You see the Flatline to downward Model S & X in USA. So. Much. For. That.
Yes the Roadster2.0/Semi Tech Reality Distortion Field distraction/misdirection works on the punch-drunk zombies and poorly educated, to Deflect Model 3 Severe production ramp up / quality probs.

Model X Waiting List (not demand) did evaporate Quicker than intended, probably because it costs so much. Obviously, Model S Waiting List was Zero probably back in 2013/14, as it is a 5-6 yr old car. If Model 3 LA/California Waiting List evaporates in 6-12 months after non-employee NDA-gagged sales start, OR if any horrible quality disasters or autopilot deaths etc, then TSLA shorters will start their Powwow circling the wagons.

Tesla is a battery company that also makes the products that use it’s battery.

Plant and Equipment Growth at Tesla is also Geometric.
That’s why everyone’s crying about Tesla rocket investment style, and that they can’t keep up.

I don’t have any hard data, but based on what I see on the street, 2017 is going to be another good year for Tesla. I’m seeing a lot of refresh Model S’s.

I keep holding out for the 3 because a) it’s an amazing car and b) because I hate the car buying experience from dealers.

I don’t understand your second comment. When I purchased my Bolt I spent about 1.5 hours total with the dealer not including the time test driving in the car.

My process was – call the dealer and expressed interest in a Bolt with specific options. Dealer called me when they had a match. I test drove the car and told the dealer the discounts I was eligible for. Dealer agreed to the price and I was done.

While Tesla sales are commendable, all sedan sales are in decline. These companies are selling more SUVs, in fact all of them are making record number of sales and profits.

The sales of the Compliance CARB cars by these manufacturers has also hurt their sales. Instead of making a real engineering investment, they built really poor hybrids, plugin’s and EV’s, and therefore they didn’t have a product that competes with Tesla.

The Ford Products are the perfect example.
These are clearly subcontracted solutions.
You can’t win if you don’t compete.

The first generation of German hybrids were disappointing. But the last few examples (BMW 530e, for example) are very compelling. Many owners get 60+ mpg, with great performance, unlimited range and better price point than Tesla. If I had just one car, I would rather have a plug in hybrid than a BEV.

LOL, another propaganda sh.. from Evanex.
Tesla sold a few cars cause of the hype and help of the tax payer and fanbois think they gonna rule the world.

Yeah, Hype. They must have Bribed Consumer Reports for it’s review of the Best Car ever Tested.

Hype.
Not clear Performance.
James, do yourself a favor stay out of the stock market.

People and media are always talking about Tesla’s bottom line in the US, but they don’t realize that in Europe and other countries the support and the need for sustainable energy of far greater, and Tesla has made a big impact on giving people there a great electric car, not to mention the excellent Supercharger network for its customers. The very mention of sustainable energy in America is just a ignorant blip in the minds of our greedy American culture, but in Europe, China, Japan and other nations sustainable energy is very real and the acceptance is growing far faster than here.
The Model S and X have record sales but far more importantly the Model 3 will have major automakers and the oil companies shaking and stumbling when it and the future Model Y reach Europe, along with the Tesla Semi.