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Tesla Loses European Luxury Market Crown To Mercedes, BMW

Tesla Loses European Luxury Market Crown To Mercedes, BMW.

“Model S is not even a faint match for the usual front-runners in Europe’s luxobarge market, but when it comes to pricing, would be Model S buyers have to fork out roughly the same money as the average S-Class buyer”

Tesla Inc’s electric Model S sedan lost its title of number one selling luxury car in Western Europe in 2016, but only by a whisker as the Mercedes S class and all-new BMW 7-Series shared the spoils.

According to British-based newsletter Automotive Industry Data (AID), quoting what it called its exclusive statistics, the mainly diesel powered S-Class and 7-Series sedans sold just under 12,500 in 2016, while the all-electric Tesla Model S sold about 12,400. These three were ahead of the Audi A8 and Porsche Panamera. 

In 2015 Tesla sold 15,787 Model S sedans, beating out the S-class’s 14,990.

Western Europe includes all the big markets like Germany, the biggest, and France, Britain, Italy and Spain.

Last year, Tesla’s biggest market in Europe was oil-rich, socialist Norway, which prices many traditional powered cars out of the market with punitive taxation and offers huge tax breaks, free-parking and unlimited city access to electric ones. But in 2016, Britain was Tesla’s biggest market in Western Europe with Model S sales of 2,490, accoding to AID.

Tesla Model S sales were probably helped by the souring atmosphere surrounding diesels. Diesel’s image has been dented by fallout from the Volkswagen “dieselgate scandal”, while reports that emissions from diesels are causing a huge health crisis haven’t helped either. For years diesels represented about 50% of all new car sales in Western Europe. And that’s now on the slide. The premium sector is being hit even harder because about 75% of cars like the S class and 7-series were diesels.

Kind to the climate?
The mantra used to be that industry leaders and politicians sitting in the back of their luxury limos could claim that at least their massive chariot and on-the-company/taxpayer perk was kind to the climate in terms of frugal fuel consumption. That pose has now been fatally damaged.

AID editor Peter Schmidt said Tesla’s performance in Western Europe against the local long-term luxury favourites is remarkable because the vehicle is much smaller. But it still commands a hefty price tag.

“Although Tesla’s Model S, in terms of overall size and interior roominess is not even a faint match for the usual front-runners in Europe’s comparatively small luxobarge market, when it comes to pricing, would be Model S buyers have to fork out roughly the same money as the average S-Class buyer,” Schmidt said.

“In Germany, where some 1,474 were sold last year, Model S prices currently start at some 81,400 euros ($87,800) and currently end at nearly 159,200 euros ($171,730) for the top of the range all-wheel drive model. Last year some 1,360 of the 1,474 Model Ss sold in Germany were of the all-wheel drive version,” he said.

Don’t expect the German manufacturers to take this lying down.

Porsche has announced it will make the Mission E all-electric vehicle aimed at the Model S. VW subsidiary Porsche joins its stable mate Audi’s all-electric e-tron Quattro SUV.  This will directly confront the Model X SUV. Both these models are expected next year. BMW’s competitor is lat and probably won’t show up until 2021.

Green credentials
Tesla’s green credentials are proving an overwhelming attraction at the top end of the market where price is less important and image is all.

German car makers have been throwing money at trying to match Tesla and also to find other ways of meeting upcoming European Union (E.U) rules which demand much higher fuel economy. The E.U. demands average vehicle fuel consumption of 50 miles per imperial gallon now, tightening by 2020 and 2021 to nearly 70 mpg. That’s the equivalent of

41.6 miles per U.S. gallon now, to 58 mpg in 2020/21. U.S. rules call for 54.5 mpg in 2025, or at least they did when President Obama left office.

In February AID said Tesla sales will probably stagnate this year because of weakening demand for the Model S sedan and supply problems with the new Model X SUV, but sales should start accelerating again in 2018 when the Model 3 is expected to arrive.

In the first two months of 2017, Tesla sales in Western Europe reached 1,579 Model Ss and 842 Model Xs, AID said.

  

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