The luxury market has a new champion as Tesla took the top sales position for 2022, displacing BMW the previous leader. The electric vehicle maker doesn’t break down its sales by region, therefore the numbers are estimates based on new vehicle registrations. Nevertheless, Tesla sales fell just shy of 500,000 units for 2022, beating out second-place BMW by approximately 155,000 units.
Tesla Manages Tough Headwinds
Tesla’s ascendancy is remarkable, given the persistent and widespread shortage of materials and auto parts since the pandemic began. Indeed, with the semiconductor chip scarcity still a factor, Tesla managed to see global sales rise by more than 40 percent even as competitors struggled to stay even or experienced substantial losses.
The Lincoln brand was the last American marque to seize the top luxury position, doing so in 1998. However, Ford’s luxury nameplate is a shell of its previous self, relying on four utility vehicles for sales of just 83,486 units, per the company. Besides Tesla and BMW, Lincoln trails Mercedes-Benz, Audi, Acura, and Cadillac.
Four Tesla Models
Tesla relies on just four models, with the bulk of its sales realized through two – the compact Model Y SUV (225,799) and the compact Model 3 sedan (195,698). But sales of its two other models remain strong with the large Model S sedan (90,473) and the Model X SUV (24,099) accounting for the rest of the sales.
This year, a fifth model is expected, as the Tesla Cybertruck arrives. Originally planned for 2019, the long-awaited fully electric pickup truck may roll out as early as this Spring, although further delays should not surprise anyone. The Cybertruck lost its place and perhaps its momentum to the Ford F-150 Lightning EV. Other electric trucks include the Rivian R1T with several more competitors readying their models.
Tesla Price Cut
Tesla still controls the EV market, selling eight times the number of electric models as second-place Ford. The company is building new plants in the U.S. as well as overseas, effectively ensuring its hold on the market.
The automaker surprised analysts and consumers alike when it cut prices across the board in January. Drastic cuts on some models enable consumers to claim the $7,500 federal tax credits on EVs, which are limited to vehicles costing no more than $55,000.
Tesla’s most popular vehicle, the Model Y, saw the most significant drop with the base version reduced by $13,000 to $52,990. The price cuts for the remaining models are at least 6 percent, enabling Tesla to dictate the market. Moreover, consumers who were on the fence about purchasing electric now have a strong incentive to flip the switch. We do not forecast sales, but it is easy to conclude that Tesla will lead the luxury segment again in 2023 and easily outperform other EV makers.
Other Markets
Tesla is strong in China although BYD, a Chinese manufacturer, outsells it. But recent price cuts there have brought consumers to showrooms, placing orders, and facing extensive wait lists. The company’s Shanghai gigafactory builds vehicles for the domestic market. None are shipped to the U.S. Tesla also has a factory in Brandenburg, Germany, and is exploring a facility in Mexico. Last year, the company sold nearly 1.4 million models globally, gaining market share and furthering the case for electric vehicles.
With its strong growth, the company continues to expand its charging network to support those vehicles. It can take as little as 15 minutes to add 200 miles of range on some models and at a cost similar to fueling with gasoline. Free public charging stations are also an option as is charging at home when electricity rates are lowest.
References
Day, L. (2023, January 12). Tesla Takes Top Spot in US Luxury Car Sales, Dethroning BMW. The Drive.
Motavalli, J. (2023, January 13). Tesla Motors Cuts Prices Across Its Lineup. U.S. News.
Lesjak, Z. (2023, January 9). Tesla Sales, Revenue & Production for 2023: The Complete Statistics. Tridens.
Tulumba, C. (2012, October 27). Overall U.S. Auto Industry Sales Figures. GCBC.
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