Hacking luxury: Tesla takes over the premium car segment

Launched in 2003, Tesla Motors [NASDAQ: TSLA] has done what the naysayers proclaimed impossible. The Silicon Valley company has hacked its way into the impenetrable, German-dominated luxury car segment. For some context, before launching the Tesla Roadster, The Truth about Cars published an ongoing Tesla hate-fest titled the "Tesla Death Watch" after finally ending the series after 41 installments. In addition, in the early days the Tesla Model S was commonly referred to as vaporware by many in the automotive media. But the tables have turned. Recent sales data clearly demonstrates that the naysayers were completely misguided — Tesla has taken over the premium car segment.

Above: Tesla Model S has stormed its way into ruling the luxury car segment in less than a five years (Above: (Source: @wurth_cz)

Fred Lambert at Electrek points out, "Tesla is literally selling more all-electric sedans in the US than Mercedes and BMW are selling S-Class and 7-Series combined." Wait... what? That's right. He's referring to data first revealed in Bloomberg explaining that, "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."

Above: Tesla's internal Q3 U.S. large luxury sedan sales data (Source: Bloomberg / competitor information compiled by the automaker)

And it's not just sales data — they're beating luxury competitors based on overall brand experience. As reported in Teslarati, "According to a new study conducted by leading experience consultancy Group XP, Tesla tops the list of automakers as the brand with the best overall brand experience, besting BMW, Mercedes-Benz and Ferrari." The study notes: "Who else but Tesla could take on a heavily entrenched industry like automotive and turn it on its head? Having launched highly rated, luxury-valued electric cars, Tesla has gone on to inspire and expand a roadside recharging network and build the world’s biggest Giga battery factory while also advancing the concept of driverless autos from science fiction fantasy to widely anticipated reality.”

Above: Top 30 global brands ranked by Group XP [download] via Teslarati

And this year, Forbes reports that Tesla has also broken into the Interbrand Best Global Brands List. “Tesla has proven that you can break in to build a car brand from scratch — no one has done that” in the modern era, Daniel Binns, managing director of Interbrand explains. “No major outside force has been able to do it the way Tesla has... the Tesla brand punches so far above its weight, it has such a presence among the man on the street that, when you ask them who’s innovating in this category, it’s Tesla, despite the small number of cars it has produced so far. It’s a reflection of future performance."

Above: Tesla Model S (Image: Teslarati)

Over the years, Tesla hasn't been a stranger to receiving awards and accolades. The media has gone from calling the Tesla Model S "vaporware" to scoring 103 out of 100 via Consumer Reports — in essence, breaking their ratings scale. It's become so popular that a plethora of Tesla fanboy ads have gone viral. Now, we're starting to see other brands borrowing Tesla's luxury brand image in order to add sophistication and sexiness to their own brands — case in point: check out this Czech Republic brand, Würth, who prominently features a Tesla Model S in their own self-made ad...


Above: Würth, a brand out of the Czech Republic, uses a Tesla Model S in their advertising to promote a sexy, sophisticated vibe in their commercial (Source: @wurth_cz)

And this premium sentiment extends to the stock market as well. Popular Wall Street media outlet, Motley Fool, recently reported that, "When the [Motley] Fool asked its 636,000 followers on Twitter about Tesla's investment prospects, the majority was clear: It's time to buy Tesla stock. Polled in September when the stock was trading at about $196, or about 2% below where it is at the time of this writing, 48% of the 3,206 surveyed respondents thought Tesla stock was a buy, 29% thought it was a hold, and 23% believed it was time to sell." They go on to report that with the forthcoming Tesla Model 3 on the horizon, "Tesla shareholders may be positioned to benefit from a major industry transition."


Above: Tesla Model S and Model X vehicles parked in front of Tesla's factory in Fremont, California (Source: Motley Fool)

So whether it's investor sentiment, vehicle sales data, brand accolades, or media reviews — Tesla has elevated its brand and its vehicles into the ranks of luxury automotive companies, some of whom are over 100 years old. And, we have to agree with the folks over at Motley Fool — based on Tesla's ~400,000 pre-orders, its Model 3 will certainly give Tesla entrée into a larger market (and mainstream audience) which could help the company grow exponentially. Next up: hacking into the mass market.