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The ‘Tesla Stretch’ is proving car buyers will pay more for a Model 3
Posted on November 18, 2018 by Matt Pressman
The Tesla Model 3 is turning out to be an electric car that's seducing car buyers across multiple market segments. According to CleanTechnica, "45% of current electric car drivers plan to buy a Tesla next." Okay, that's understandable. Non-Tesla EV drivers might be interested in a Tesla. That said, it's extraordinary how many gas-powered car owners, from vastly different auto segments, are transitioning to Teslas.
Above: Tesla's Model 3 (Image: CleanTechnica)
Bloomberg reports, "When Chief Executive Officer Elon Musk first revealed the Model 3 at a late-night party in March 2016, the vehicle was expected to compete in the premium sedan market against the likes of Audi, BMW, Lexus and Mercedes. Instead, owners of mass market cars like the Honda Accord and Toyota Prius are opening their wallets for the sedan, signaling that the vehicle is pushing Tesla beyond its luxury niche and more into the mainstream."
"For Earl Banning, getting behind the wheel of a Tesla meant spending more than he ever had on a car. The 43-year-old Air Force neuropsychologist from Dayton, Ohio, ponied up $54,000 for a Model 3, figuring he would save on gas and keep the car for a long time. It was almost double what he had previously paid for a fully loaded Honda Accord," reports Bloomberg.
Above: The most common cars traded in for a Model 3 according to Tesla's CEO Elon Musk (Chart: Bloomberg)
Banning says, "I call it the Tesla Stretch — everyone I’ve met who owns a Model 3 is willing to spend more to get into a Model 3.” For example, a former Nissan Altima owner, 36-year-old Eric Snapat, spent nearly $60,000 on his new Tesla. And 26-year-old Robert Preston actually charges $155 a day to rent out his Tesla on Turo to help pay for his new Model 3. “Every weekend I have someone renting it,” Preston said.
"Tesla recently said that more than half the trade-ins for the Model 3 were from vehicles priced below $35,000. And there are signs that the sedan’s popularity is adding [some] pressure on rival carmakers... In October, sales of cars such as the Accord and Prius continued to slip as deliveries of the Model 3 ramped up," according to Bloomberg.
“Tesla has captured lightning in a bottle,” said Jeremy Acevedo, manager of industry analysis at researcher Edmunds. “It’s hard to even benchmark the Model 3 against other cars because it’s broken the mold in so many ways.”