Tesla Motors (TSLA) Annihilates Rivals in U.S. Luxury Sedan Sales

Tesla Model 3 (TSLA)

Tesla Motors Inc has had some troubles with Autopilot in the last couple of months after it started attracting attention and headlines for all the wrong reasons. However, the troubles with Autopilot have not stopped the firm from recording massive sales on its cars. In fact, it seems that the bad press surrounding Autopilot has only served the purpose of drawing more people to buy the firm’s cars. Tesla Motors is selling a high number of its Model S sedans at the expense of rivals in the U.S. luxury car market.

Tesla annihilates rivals in U.S. Luxury Sedan Sales.

Tesla Motors Inc usually keeps its sales data close to the chest and the firm only releases its sales data during its quarterly releases. Nonetheless, folks at Bloomberg have laid their hands on a Tesla internal memo showing the third quarter sales number. The more interesting point in the memo is that the memo compares the number of Model S sedans sold in the third quarter with the number of large luxury sedans that its rivals sold in the same period

Tesla Motors Inc. (TSLA) Store in Southern California

To start with, Tesla sold 9,156 Model S sedans in the third quarter up from 5,756 in the comp quarter in 2015. In essence, the firm recorded a 59% year-over-year increase in Model S sales and it now controls 32% of the U.S. Luxury sedan market. In contrast, its closest rival, the Mercedes S Class sold 4,921 cars in the third quarter down from 5,414 units in 2015. The Mercedes Benz S Class now controls a 17% share of the U.S. luxury market. The BMW 7-Series occupies the third position with a 13% market share.

More so, the Model X seems to have outgrown the initial problems that plagued it soon after its debut. The car wasn’t produced fast enough to satisfy preorders and the first ones out of the market had issues ranging from doors that won’t open to panoramic glass than intensified the heat from the sun.  However, the firm reported that it sold 5,428 Model X SUV in the U.S. to control a 6% market share in the U.S. luxury SUV market.

Tesla is coming on strong in the U.S. auto market

Tesla Motors CEO, Elon Musk has ambitious plans and the fact that the demand for his cars is surging earns him the bragging rights to be ambitious. One of his ambitious plans when he started building EVs was to sell 500,000 cars by 2020. The arrival of the mass market Model 3 and the warm welcome that the car enjoyed in terms of 400,000 preorders suggests that the firm will reach the 500,000 milestone much earlier by 2018.

Now, Musk is planning to double the size of the Fremont, CA assembly plant, in a bid to ensure that the delivery of the Model 3 starts as planned and in order not to force buyers though a long wait for their cars. It was reported that the firm has proposed a long-term zoning plan to the Fremont Planning Commission it a bid to increase its plants 4.5 million square feet by another 4.5 million square feet.

The huge number of preorder that Tesla recorded for the Model 3 has raised fears that the firm is stretching itself too thin. However, the fact that the firm is now working on increasing its production capacity has laid those fears to rest. You can expect the Model 3 to break some records when it eventually hit the roads in the entry-level luxury car market.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.


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