Tesla Dominates U.S. Luxury Sedan Sales

When it comes to big premium cars, the automaker says BMW, Mercedes, and Audi aren’t even close.

Tesla's Road to Sales Success and Driverless Tech

Tesla Motors Co. is facing some serious challenges keeping up with its ever-expanding ambitions, but one thing is certain: It’s selling a lot of luxury cars. 

Tesla’s U.S. sales of its Model S sedan jumped 59 percent over the same quarter last year, increasing its already sizable lead among large luxury cars, according to internal third-quarter sales numbers—which Tesla usually keeps confidential—and competitor data compiled by the automaker. Tesla says it’s now responsible for almost a third of all sales in the segment. Its nearest competitors are the newly updated BMW 7-Series and the Mercedes-Benz S-Class. 1 There will always be debate about what constitutes a "large" vs. a "midsize" sedan or what differentiates a "sedan" from a "coupe." The table represents the classifications provided by Tesla.  

Source: Tesla internal sales data and competitor information compiled by the automaker.

Source: Tesla internal sales data and competitor information compiled by the automaker.

In the luxury SUV market, Tesla says its new Model X sold 5,428 U.S. cars for a 6 percent market share in the third quarter. That’s its highest mark yet after production issues plagued the rollout of the car earlier this year. According to Tesla’s data, the Model X outsold Porsches and Land Rovers but trailed seven SUV models made by Mercedes, BMW, Cadillac, Volvo, Audi, and Lexus.  

Kenn Sparks, a spokesman for BMW, declined to directly address Tesla’s data. “The numbers do show that electric cars are progressing and continuing to gain in popularity,” Sparks said in an email. “That’s ultimately good for us all.” Spokespeople for Mercedes didn’t respond to an email request for comment. 

Tesla Chief Executive Officer Elon Musk had been pushing employees to sell as many cars as possible in an effort to achieve a profitable quarter before the company needs to increase spending. Tesla is trying to acquire SolarCity Corp. and preparing to roll out its lower-priced sedan, the Model 3, late next year.

The numbers represented in these two classes of luxury vehicles are small compared with the 17 million cars and trucks sold in the U.S. last year. Tesla is hoping to replicate the success of the Model S  with its $35,000 Model 3—a daunting prospect that includes completion of a massive battery factory in Nevada, expansion of its factory in California, and the build-out of a global sales and service network. 

The Model 3 will be one of the more affordable cars in the entry-level luxury class, and if Musk can achieve his forecast of building 500,000 Teslas a year by 2018, the automaker could find itself atop three categories of luxury cars. But that’s a big if. 

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