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Tesla Model S Is Third Best-Selling Luxury Car In California
Jeff Cobb September 2, 2013
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As of this year’s first six months, California-based Tesla Motors’ Model S is the third best-selling luxury model in the Golden State.
According to the California New Car Dealers Association, the electric car maker sold 4,714 examples of its all-electric luxury sedan through July compared to the second-place BMW 5-Series with 6,077 sold and the Mercedes E-Class with 6,582.
We’ve seen reports California may account for half of Tesla’s sales, but that may be an overestimation. As of July, the HybridCars.com Dashboard showed first-half-year Model S sales nationally at an estimated 12,200 sold.
Assuming this is reasonably accurate (our analysis based on existing data believes it is, but Tesla does not report monthly sales), Tesla’s California sales would be somewhere around a still-considerable 39 percent of the U.S. market.
Otherwise there is little question Californians are more positively predisposed toward electric and electrified vehicles.
As the LA Times observed, the Toyota Prius hybrid is the overall best seller in California, and many other hybrids do exceptionally well there also.
Since 1967 legislation under Gov. Ronald Reagan established the California Air Resources Board, Californians have had a state agency mandating a cleanup of its air that has dovetailed into embracing electric modes of transport.
Tesla also happens to be a California success story, so perhaps loyalty and pride play somewhat into the decision in state to give Tesla the business – and actually, CEO Elon Musk is hugely popular in certain circles, and Tesla Motors and his other ventures have come to represent a phenomenon to many.
Impulse Buy?
Among several other reasons for the Model S’ success, not least of which is that it is a stellar car, period, it’s being suggested that Tesla’s unorthodox store model is garnering significant sales even from people who were not thinking of buying a car.
In a piece this week by Forbes written to entrepreneurs titled, “Why You Should Copy Tesla’s Way of Marketing,” the writer says Tesla’s method is positively brilliant at growing its business.
Instead of the usual car dealership location along a main road, Tesla places small boutique-like “stores” or “galleries” in urban shopping malls which have extremely dense floor traffic consisting of random shoppers generally disarmed against the usual car buying experience.
“Most cars dealerships would be lucky to get a hundred potential customers perusing the cars on their lot each day,” observes Forbes. “But because of their location, Tesla gets tens of thousands of people walking right past their car, every single day.”
And Tesla’s low-key approach does not tend to disappoint shoppers who are met with associates there to give info with no pressure to place an order.
But order people tend to do, just the same, which in many cases means strangers are converted to Model S owners in a remarkable process.
While grocery stores strategically place magazines and candy at check-out aisles hoping shoppers will snap up a few of the low-priced, high-profit items, Tesla is essentially doing something not dissimilar with cars costing $71,000-$133,000.
Or so goes the assertion made by the entrepreneur-inspiration piece that says Tesla has scored many a sale from those not in the market, thus adding solidly to its profits.
At the same time, Tesla’s on-again, off-again opposition by various state auto dealer associations remains. Tesla operates factory direct, and this is seen by critics as flouting a long-established dealer franchise system typically mandated by state law.
As a more potent example of dealer associations blocking Tesla, the automaker is barred from sales activities at its Austin and Houston “galleries” in Texas – a state Musk has said he’d like to make second only to California.
As Tesla’s stock price has climbed this year to four times what it was just last year, the company represents a bold experiment. While skeptics say the momentum cannot continue as it has, or they doubt it will, it seems every time we turn around more positive Tesla news is coming forth.
The latest is Tesla has in one year since the July launch of its first and only sedan upstaged automakers that have had decades to establish themselves in America’s number one automobile market.
Perhaps the Mercedes E-Series, and BMW 5-Series ought also to watch their rear view mirrors?
LA Times. Forbes
Posted in Culture & Market
Tagged as BMW, electric luxury car, Elon Musk, mercedes-benz, Tesla Model S, Tesla retail stroe, Tesla Texas
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