Tesla Model S tops Mercedes S Class to become best selling luxury car in Europe

As reported in Forbes, "Tesla Model S is the best selling luxury car in Western Europe, accelerating past traditional high-status and internal combustion engine powered favorites like the Mercedes S class, BMW 7 Series, Audi A8 and Porsche Panamera. In 2015, according to British-based newsletter Automotive Industry Data (AID) quoting what it called its exclusive statistics, Tesla sold 15,787 Model S sedans, beating out the Mercedes flagship S-class’s 14,990."

Western Europe includes all the big markets like Germany, the biggest, France, Britain, Italy and Spain. "Tesla is blazing a trail that other top-notch car makers may have to follow in coming years,” said AID editor Peter Schmidt. 

Automotive Industry Data (AID) newsletter notes that: "Echoing its recent pioneering track record in sunny California, and buoyed by rave media reviews, for at least some of Europe’s well-heeled early adopters the Tesla Model S now comes with all the familiar hallmarks of the latest driveway prestige symbol." Then, the newsletter reports: "A first sign of what the future holds in store... Mercedes’ flagship S-Class, for long the most popular luxury chariot in Western Europe, was last year outsold in Western Europe by Tesla’s comparatively recent all-electric Models S."

Now Tesla has beaten Mercedes in both the U.S. and their home turf in Western Europe. Motley Fool explains, "Home-field advantages aren't always what they seem. Investors already know that the Tesla Model S beat out [see below] the venerable Daimler Mercedes-Benz S-Class last year in the U.S. market for large luxury vehicles... The S-Class, which starts at $95,000, has long dominated this market segment, so Tesla's victory was no small accomplishment."

Mercedes-Benz parent company Daimler AG had its Shareholders Meeting and Tesla was a hot topic of conversation. Yesterday the Financial Times (FT) reported that, "Shareholders at Daimler on Wednesday expressed concern at the threat posed by Silicon Valley companies including Tesla... At Daimler’s annual shareholders’ meeting in Berlin, Ingo Speich, portfolio manager at Union Investment, said capital markets were worried that the 'fat years' for premium German carmakers could soon be over. He warned the automobile industry faced 'a radical upheaval, driven by attacks from Silicon Valley'." 

It was also reported that Tesla's new Model 3 was cause for concern: "Another Daimler shareholder complained to management: 'We don’t really have a product for this competition from Tesla. In the long term we have some great vehicles . . . but they are virtual at this point.' A third shareholder said there was no adequate European competitor to Tesla’s latest model [3]. He asked management: 'What is the reason for that?'" Even worse, a recent survey by Germany's Autobild shows over 2/3 of all Germans polled said they would consider purchasing a Tesla Model 3.

It's quite a turn of events as Mercedes and Tesla have a somewhat storied history together. According to Bloomberg, "When Daimler bought into Tesla in 2009, it was able to get a 9 percent stake for $50 million... The five-year partnership yielded the technology that powers the Mercedes B-Class, the company’s first foray into mass-market electric cars." But, in 2014 things started to sour: "Daimler AG sold its stake in Tesla Motors... [and] the share sale generated about $780 million in cash." Sure enough, yesterday, another shareholder asked if the company disposed of its shares in Tesla too early.

Now, it's clear that the once feisty upstart electric vehicle maker, Tesla Motors, can no longer be dismissed as a "niche" player by top management at Daimler AG. Daimler's shareholders are concerned. And the numbers don't lie. Tesla is a real threat to Mercedes. It will be interesting to see how Mercedes (and top European luxury automakers) face off with Tesla in the coming years. We'll keep you posted on the latest developments.

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