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Edmunds: Tesla Buyers Often Cross Shop With German Luxury Brands

Originally published on CleanTechnica.

Buyers of Tesla’s electric vehicles very often cross shop with German luxury car brands (BMW, Mercedes, Porsche, Audi, etc), according to Edmunds. And this is even before the Model 3 arrives.

Apparently, nearly 30% of Tesla buyers consider purchasing a BMW model before settling on the Tesla — and around 20% consider an Audi or Mercedes. A further 12% also consider purchasing a Porsche before deciding on a Tesla. This compares to only around 6% of Tesla buyers who considered purchasing a Dodge beforehand, for example.


Tesla Model 3 on unveiling night. Photo by Kyle Field for CleanTechnica and EV Obsession.

None of this is surprising, of course. It’s long been clear that Tesla has been stealing substantial market-share from the German luxury brands — and that much of the company’s growth to date has been at the expense of these brands.

“The decisive factor is what’s happening inside people’s heads,” commented Jürgen Pieper, an analyst at Bankhaus Metzler. “Many see in Tesla the innovation they’re missing from the Germans.”

Bloomberg provides more:

Executives at rival carmakers privately squawk about Tesla’s poor track record of manufacturing delays and persistent financial losses. Yet they can’t ignore that Musk’s products are exciting consumer passions in a way that incumbent automakers haven’t for decades.

…The Tesla advances and the threat of Apple entering the car business have led German brands to show lots of electric concept vehicles recently. But these cars are years away, while Tesla plans to start delivering the Model 3 in late 2017.

…Competition from the Model 3 might prompt German carmakers to drop some prices as much as 10% to defend their US market share, says Stuart Pearson, an analyst at Exane BNP Paribas. Tesla is aiming the Model 3 at “those looking to spend roughly $40,000 on a car, and that’s the core target market for BMW and Mercedes basically,” he says. “The fact is they don’t really have an answer to the Model 3 until the next decade.”

The bottom line: Tesla’s Model 3 could draw sales from German luxury carmakers’ bread-and-butter vehicles, prompting price cuts.

Considering what’s happened to the market shares of the German luxury companies since the launch of the Model S, it seems fairly likely at this point that the Model 3 will hit the market shares and pocketbooks of the German luxury brands pretty hard.

Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.


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