Tesla Model 3 poised to replace the BMW 3-series as top-seller in U.S. compact luxury segment

This weekend, Tesla Motors [NASDAQ: TSLA] CEO Elon Musk tweeted that Tesla Model 3 reservations surpassed 276,000. To provide perspective, the Wall Street Journal reported, "The figure is staggering... To give a sense on the scale of the backlog, BMW sold about 95,000 3-series sedans in 2015 in the U.S. The Model 3 is roughly the same size and price and would likely outsell the U.S.’s best-selling compact luxury car in its first year of production."

Above: Photo we shot when attending the Tesla Model 3 launch event

Wait... what? That's right, in just a few days, Tesla had booked enough U.S. reservations that it could (conceivably) surpass the best-selling BMW 3-series. We wanted to dig a bit deeper into the numbers to see if, in fact, this could happen downstream. It turns out that Siddhartha Dalal wrote a fascinating article for Seeking Alpha* that takes a closer look at the Tesla Model 3 within this ultra-competitive compact luxury car segment.

Source: Tesla Motors

Dalal notes that the flood of Tesla Model 3 reservations was comparable to the original Apple iPhone launch, "Just for comparison, over the first two days the original Apple iPhone sold 270,000 units. So [exceeding] 200,000 reservations for a $35,000 car to be delivered two years from now or more is an impressive feat by any measure." To clarify, this wasn't $600 for a phone you get right away, it was a $1000 reservation for a car you'd likely wait 18+ months for -- yes, quite a feat. That said, let's take a look at the chart Dalal uses to illustrate the Tesla Model 3 competitive landscape...

Source: Seeking Alpha* / Good Car Bad Car

From the data, Dalal extrapolates that: "The sales of the Model 3 will easily surpass all the competition. A few days ago even Audi admitted that Tesla has done everything right. Let's assume reservations slow down and they just double from the current number by the time the Model 3 launches. And let's say that Tesla takes two years to deliver these 400,000 orders. That's an average rate of 200,000/year in 2018 and 2019. And if this is split 50/50 US/International, we have 100,000/year in the US, which represents a 16% market share of the small luxury sedan market."

Source: Tesla Motors; Car Empire

Once might argue that the Model 3 design language (see above) makes its German competitors look dated. However, aesthetics are a matter of personal taste, so looks aside, Dalal points out, "None of the competition has the autopilot safety features standard. As an example, to get the equivalent safety features on a BMW you would need to pay an extra $5,400 ($1,700 for their driver assist package which forces other packages on you). Mercedes will charge you at least $3,350 for the features. You are forced to get something more comparable (but in in my opinion still inferior) to the Tesla autopilot to get even the safety features... [and] none of the competition even has OTA [over-the-air software] updates." 

Source: ColdFusion

And what about performance? Even BMW Blog admits, "Tesla Model 3 stands to threaten the automotive segment that’s been dominated by the BMW 3 SeriesAudi A4 and Mercedes-Benz C Class for decades... [and the Tesla Model 3] will be able to get from 0-60 mph in under six seconds, as claimed by Musk. That performance figure rivals cars like the BMW 328i, Audi A4 and Cadillac ATS 2.0t." The article concludes, "when considering its claimed performance figures, and... at that price point and with that level of technology, BMW, Audi and Mercedes-Benz should be very nervous right now."

===

*Source: Seeking Alpha

USD
  • US Dollar (USD)
  • Euro (EUR)
  • British Pound (GBP)
  • Canadian Dollar (CAD)
  • United Arab Emirates Dirham (AED)
  • Albanian Lek (ALL)
  • Afghan Afghani (AFN)
  • Armenian Dram (AMD)
  • Angolan Kwanza (AOA)
  • Argentine Peso (ARS)
  • Australian Dollar (AUD)
  • Aruban Florin (AWG)
  • Azerbaijani Manat (AZN)
  • Burundian Franc (BIF)
  • Barbadian Dollar (BBD)
  • Bangladeshi Taka (BDT)
  • Bahamian Dollar (BSD)
  • Bahraini Dinar (BHD)
  • Bermudan Dollar (BMD)
  • Belarusian Ruble (BYN)
  • Belize Dollar (BZD)
  • Bhutanese Ngultrum (BTN)
  • Bosnia-Herzegovina Convertible Mark (BAM)
  • Brazilian Real (BRL)
  • Bolivian Boliviano (BOB)
  • Botswanan Pula (BWP)
  • Brunei Dollar (BND)
  • Bulgarian Lev (BGN)
  • Congolese Franc (CDF)
  • Swiss Franc (CHF)
  • Chilean Peso (CLP)
  • Chinese Yuan (CNY)
  • Colombian Peso (COP)
  • Costa Rican Colon (CRC)
  • Czech Republic Koruna (CZK)
  • Djiboutian Franc (DJF)
  • Danish Krone (DKK)
  • Dominican Peso (DOP)
  • Algerian Dinar (DZD)
  • Egyptian Pound (EGP)
  • Ethiopian Birr (ETB)
  • Fijian Dollar (FJD)
  • Falkland Islands Pound (FKP)
  • Gibraltar Pound (GIP)
  • Ghanaian Cedi (GHS)
  • Gambian Dalasi (GMD)
  • Guinean Franc (GNF)
  • Guatemalan Quetzal (GTQ)
  • Georgian Lari (GEL)
  • Croatian Kuna (HRK)
  • Honduran Lempira (HNL)
  • Hong Kong Dollar (HKD)
  • Haitian Gourde (HTG)
  • Hungarian Forint (HUF)
  • Indonesian Rupiah (IDR)
  • Israeli New Shekel (ILS)
  • Icelandic Krona (ISK)
  • Indian Rupee (INR)
  • Iraqi Dinar (IQD)
  • Iranian Rial (IRR)
  • Jamaican Dollar (JMD)
  • Japanese Yen (JPY)
  • Jordanian Dinar (JOD)
  • Kenyan Shilling (KES)
  • Kyrgystani Som (KGS)
  • Cambodian Riel (KHR)
  • Comorian Franc (KMF)
  • South Korean Won (KRW)
  • Kuwaiti Dinar (KWD)
  • Cayman Islands Dollar (KYD)
  • Kazakhstani Tenge (KZT)
  • Lebanese Pound (LBP)
  • Sri Lankan Rupee (LKR)
  • Liberian Dollar (LRD)
  • Lesotho Loti (LSL)
  • Libyan Dinar (LYD)
  • Moroccan Dirham (MAD)
  • Moldovan Leu (MDL)
  • Malagasy Ariary (MGA)
  • Myanmar Kyat (MMK)
  • Macedonian Denar (MKD)
  • Macanese Pataca (MOP)
  • Mauritian Rupee (MUR)
  • Maldivian Rufiyaa (MVR)
  • Malawian Kwacha (MWK)
  • Mexican Peso (MXN)
  • Malaysian Ringgit (MYR)
  • Mozambican Metical (MZN)
  • Namibian Dollar (NAD)
  • Nepalese Rupee (NPR)
  • New Zealand Dollar (NZD)
  • Nicaraguan Cordoba (NIO)
  • Norwegian Krone (NOK)
  • Omani Rial (OMR)
  • Panamanian Balboa (PAB)
  • Pakistani Rupee (PKR)
  • Papua New Guinean Kina (PGK)
  • Peruvian Nuevo Sol (PEN)
  • Philippine Peso (PHP)
  • Polish Zloty (PLN)
  • Qatari Rial (QAR)
  • Romanian Leu (RON)
  • Russian Ruble (RUB)
  • Rwandan Franc (RWF)
  • Saudi Riyal (SAR)
  • Sao Tome and Principe Dobra (STD)
  • Serbian Dinar (RSD)
  • Seychellois Rupee (SCR)
  • Singapore Dollar (SGD)
  • Syrian Pound (SYP)
  • Swedish Krona (SEK)
  • New Taiwan Dollar (TWD)
  • Thai Baht (THB)
  • Tanzanian Shilling (TZS)
  • Trinidad and Tobago Dollar (TTD)
  • Tunisian Dinar (TND)
  • Turkish Lira (TRY)
  • Solomon Islands Dollar (SBD)
  • Sudanese Pound (SDG)
  • Sierra Leonean Leone (SLL)
  • Surinamese Dollar (SRD)
  • Swazi Lilangeni (SZL)
  • Tajikistani Somoni (TJS)
  • Tongan Paanga (TOP)
  • Turkmenistani Manat (TMT)
  • Ukrainian Hryvnia (UAH)
  • Ugandan Shilling (UGX)
  • Uruguayan Peso (UYU)
  • Uzbekistan Som (UZS)
  • Venezuelan Bolivar (VEF)
  • Vietnamese Dong (VND)
  • Vanuatu Vatu (VUV)
  • Samoan Tala (WST)
  • Central African CFA Franc (XAF)
  • CFP Franc (XPF)
  • Yemeni Rial (YER)
  • South African Rand (ZAR)