
Against the odds, Tesla’s Model 3 became the best-selling luxury car in America
- by CNN
- Feb 07, 2019
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A map of Teslaâs US showrooms shows great swaths of the nation without a single dot. Because of legal challenges from traditional auto dealers, who object to car companies selling directly to customers, Tesla isnât allowed to deliver cars in some states. That means some customers have to travel quite far to get one.
The carâs relatively high price is another obstacle. When the Model 3 was unveiled, it was supposed to have a starting price of $35,000, roughly in line with many entry level luxury cars. There was so much excitement, Tesla had more than 100,000 paid reservations at $1,000 a piece before the car was even unveiled in 2016. But about a year after production started and with only about 30,000 cars having been delivered, Tesla began selling cars to customers without reservations at a higher price point. That indicated that many reservation holders were still waiting for the cheaper car theyâd been promised and that has yet to be produced.
The Tesla Model 3 is the best-selling luxury vehicle in America, despite a number of challenges Tesla faces.
Sean Gallup/Getty Images Europe/Getty Images
The Model 3âs exceptional performance relative to other luxury cars comes down to a few factors. One is that the luxury vehicle market is highly fragmented. Automakers like Mercedes-Benz and BMW offer myriad similarly-priced models, often with little difference between one another. For instance, the BMW 3-series and 4-series are essentially the same car but the 4-series has a more rakish body style and is available with two doors or as a convertible while the 3-series is available as a sedan, hatchback or wagon. In all, someone able to spend $45,000 to $65,000 on a new vehicle â roughly the Model 3âs current price range â would have at least 11 different BMW models to choose from, including cars and crossovers.
It also helps that the Model 3 has, essentially, no direct competition, said Doug Betts, senior vice president at J.D Power and Associates. Tesla has established itself as a luxury brand and, if you want an all-electric luxury sedan in that price range, the Model 3 is pretty much your only choice, he said.
If you missed Teslaâs Super Bowl ad, thatâs because there wasnât one. The company doesnât pay for traditional advertising. But the company and its CEO Elon Musk have mastered the art of building buzz.
âWhen the brand launched, they became the instant standard bearer,â said Ken Schmidt, former director of communications for Harley-Davidson and now a branding consultant. âThey immediately gathered that cache and buzz.â
courtesy Tesla
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