Tesla Selling More Luxury Sedans In The U.S. Than BMW, Audi, Mercedes

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Tesla Selling More Luxury Sedans In The U.S. Than BMW, Audi, Mercedes
Image Source: Bloomberg

Tesla is known for innovation and the ever-growing ambitions of its CEO, Elon Musk. Though it is facing some serious challenges meeting those ambitions, it hardly has any impact on its car sales. The company saw a 59% jump in Model S sales over the last year, helping it increase its already-sizable lead among large luxury cars.

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Updated models helping Tesla

Tesla usually keeps sales data confidential, but this information is based on internal third-quarter sales numbers and competitor data that the automaker has compiled, reports Bloomberg. A third of all sales in the segment are now credited to Tesla. The newly updated BMW 7 Series and the Mercedes-Benz S Class are the closest competitors.

Tesla sold 5,428 units of its new Model X in the U.S., accounting for 6% of the luxury SUV market in the third quarter. This is its best performance yet as its rollout was delayed because of production issues. Sales of the Model X exceeded those of Porsches and Land Rovers but were fewer than those of seven SUV models from competitors like Audi, BMW, Cadillac, Lexus, Mercedes and Volvo, notes Bloomberg.

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Releasing updated models significantly helped both Tesla and BMW. The EV firm released a refreshed version of the Model S with a facelift in April and also made available a few new battery options in the following months, which boosted sales. Later the company released a less expensive version with 75 kWh battery pack software limited to 60 kWh and the new P100D version at the higher-end for a ludicrous acceleration from 0 to 60 mph in 2.5 seconds.

Rising production and selling rate

Musk intends to achieve a profitable quarter, and for this reason, he is pushing employees to make the most sales. Now the EV firm is making and selling cars at a rate of about 100,000 units annually. This represents a 5x increase in capacity over a three-year period, notes Electrek.

Tesla is now aiming at another 5x increase so that within the first year of Model 3 production, it can produce 500,000 vehicles per year. Musk said Model 3 production will start in late 2017, and he expects to achieve production rate in 2018. With the Model 3, the EV firm is hoping to have a similar impact on the mid-size luxury sedan market that it commands over the large luxury sedan market with its Model S.

On Wednesday, Tesla shares closed up 0.7% at $201.51. Year to date, the stock is down more than 15%, while in the last year, it is down almost 9%.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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