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Tesla Model 3 vs. American Incumbents – Gun In A Knife Fight or Fair Fight?


Published on March 18, 2019 |
by Vijay Govindan

March 18, 2019 by Vijay Govindan

I recently played a Twitter poll to decide what to write about next. The top article voters asked me to write was an article on how the Tesla Model Standard Range (SR) competes against models from existing car manufacturers. The amazing thing is that Tesla is now competitive, without incentives. It is very competitive on a total stake, even with cars far below its class. With incentives and TCO factor in, the Model 3 is hard to beat.

Let's take a look.

The Tesla Model 3 Standard Range has a price of $ 35,000 before incentives, gas savings or maintenance savings. Based on a Green Car Report poll the Standard Range or Standard Range Plus is what 44% of Tesla Model 3 buyers would buy.

# 1 Best-selling car in the United States (2018) – Toyota Camry

From, this is the most expensive inventory Camry I could find in zip code 90210. (Not my postcode – I thought it was funny. I used the same zip code for all cars and found the highest class The vehicle for each of these models.) Some of these high margin purchases will cross-refer to SR or higher trims.

Despite being a more expensive vehicle, Camry has a metal roof instead of glass, is slower, and is less safe.

This is the most expensive inventory Camry Hybrid I found. Hybrids still suffer from disadvantages with gas engines (such as higher maintenance) as well as higher cash prices than the gasoline versions of the hybrid batteries. It is just a compromise that no longer makes sense. I expect niche hybrid buyers to favor Teslas or other fully electric cars in the future.

# 4 Best-selling car in the United States (2018) – Honda Accord

Again, the most expensive Accord (a hybrid in this case) is just below the SR price. Furthermore, with California and federal incentives, SR is well under $ 30,000.

# 6 Best Selling Car in the United States (2018) – Nissan Altima

Ditto for Altima. Dealer prices will vary. Tesla online prices will not.

Nissan Maxima

Maxima aims at the upper end of the mid-sized sedan market. It is simply in the sights of model 3 trims.

What does Maxima actually offer that would have someone choose it over a Model 3 Long Range?

Nissan LEAF

I expect that the new LEAF sales will work well, especially in Europe. The 60 kWh version is expected to be $ 5,500 more than the base 40 kWh version. This car is eligible for a full $ 7,500 federal tax credit and government incentives. The lower price plus the big Nissan negotiation network can persuade some buyers to go this route. Some of CleanTechnica employees have the magazine. But the model 3 has clearly faster acceleration, more advanced navigation, Easter eggs, a glass roof, Supercharging and more cached.

# 8 Best Selling Car in the United States (2018) – Ford Fusion

Ford Fusion was the 8th best-selling car in the United States in 2018, according to CleanTechnica. This car is now discounted $ 4000 from MSRP, probably because it is expired. As such, this is near the Model 3 SR. The above model is the plug-in hybrid version of Fusion Energy.

# 9 Best Selling Car in the United States (2018) – Chevy Malibu

Model 3 SR is competitive with the top of the Chevrolet Malibu. What do you want to buy?

# 12 Best Selling Car in the United States (2018) – Hyundai Sonata

Hyundai Sonata was # 12 in 2018 best-selling car list. Model 3 Mid Range / Long Range was # 11. Standard Range is now priced competitively with Sonata.

Here is one of the errors in the negotiation model. If I wanted this Sonata Hybrid, it would be nearly 35 miles from the zip. The closest thing I could see was 17 miles away for a similar vehicle. Tesla's online sales model and home delivery sounds better to me.

I continue to believe that the plug-in hybrid market will fall to full electric power (BEV) faster than the pure hybrid market. I hope that manufacturers who see the demand for BEV will rapidly increase the supply of their own BEVs. It's better for all of us.

You can argue, and I would disagree that Model 3 has luxury car prices and should be compared to luxury competition. The reason I do not agree with Tesla's Q4 2018 Shareholder letter shows that previous owners come to model 3 from a wide range of sources, such as medium-sized cars, hybrids and the luxury market. Cannibalization of Tesla S and X vehicles was very minimal. This was when the car had average sales prices close to $ 55,000! Now the car is 36% cheaper, with a starting price of $ 35,000. Demand will increase significantly and may cause even cheaper cars to be traded for model 3.

To show that SR is competitive with luxury cars, let's show the cheapest luxury pricing for the following vehicles.

# 20 Best-selling car in the United States (2018), # 2 Small or medium-sized luxury car in the United States (2018) – Mercedes-Benz C / CLA class

The Mercedes C / CLA Class was # 20 on our list of best-selling cars for 2018 and # 2 on our small + mid-sized luxury cars list. It was the only luxury wagon except model 3 to make the 2018 Best Selling Cars list. SR is spot on in price with the CLA 250 Coupe. The C300 meanwhile is much more expensive.

# 3 Small or medium-sized luxury car in the United States (2018) – Mercedes-Benz E-Class

The Mercedes E-Class was # 3 on our list of luxury cars. This is considerably more expensive than SR. A buyer in this area can compare the E class with model 3 long range or performance variants.

# 4 Small or medium-sized luxury car in the United States (2018) – Lexus ES

Lexus ES is No. 4 on our 2018 luxury cars list. The lowest I could find was around $ 41,000 to $ 43,000. Lexus is known for its quiet ride and high reliability. Model 3, due to its electrical nature, is super quiet. It also strikes the fuel economy of Lexus, by far. I'm sure someone would prefer Lexus for their luxury finishes. Others can venture out and buy their first high-tech luxury Tesla.

# 5 Small or medium-sized luxury car in the United States (2018) – BMW 3 Series

Finally, the iconic BMW 3 series is topped up on # 5 on our luxury car list. Remember that # 1 was the Model 3 Long Range and Mid Range. Since the end of 2018, the Long Range has undergone a significant price reduction.

The BMW 3 Series was the reference Tesla set to beat. For decades, the BMW 3 Series was the car with the best driving characteristics. Many now price model 3 to be unsurpassed in driving quality.

The lowest price 330i I could find was close to $ 43,000. It would be equivalent to model 3 LR. If LR strikes the 3-series at a higher price, we can imagine the carnage now that LR is the same price.

I leave you with these two charts of all competitors in the small + mid-sized luxury market. The first shows each luxury mid-sized car as a percentage of the Model 3 SR price. We can see the Model 3 SR is very close or under all top players.

In the next chart we see each car adding its market share to the previous car. We see the sudden jump with model 3. Remember this was with a more expensive model last year. At $ 35,000, the Model 3 SR has another 71% potential market available for cars that are priced much higher (but have poorer performance). This is extraordinary and points to the continued success of model 3 in the luxurious mid-range segment.

For the trolls concerned, financial analysts and hostile journalists were unable to worry about model 3 requirements in the US, Europe, China, and beyond, pay attention to my words: Model 3 sales will continue to surprise and scare the current auto operators. The demand for all model 3 trims will flow steadily higher. Every factory Tesla builds will be more efficient than the last one. Each new car, Tesla introduces, will target large, fat, existing profit centers. Are you ready to tear?

Tesla brings a gun to a knife fight. It won't be pretty.

Tags: BMW, BMW 3 Series, Chevy Malibu, Daimler, EV Sales, Ford, Ford Fusion, GM, Honda, Honda Accord, Hyundai, Hyundai Sonata, Lexus, Lexus ES, Lexus ES Hybrid, Mercedes, Mercedes-Benz C-Class, Mercedes-Benz CLA Class, Mercedes-Benz E-Class, Nissan, Nissan Altima, Nissan Leaf, Nissan Maxima, Tesla, Tesla Model 3, Tesla Sales, Toyota, Toyota Camry


Vijay Govindan Vijay Govindan is interested in sustainable longevity, economic education and the intersection of astrophysics and climate change. Rick and Morty fan. Follow him on twitter @ vgovindan17

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