Tesla Will Stop Europe Sales Slide Before Model 3 Boost In 2018.
“But despite last year’s performance, the future looks bright for Tesla in Europe. Before we know it Tesla sales will go up again”
Tesla Motors sales in Western Europe slid last year, according to newsletter Automotive Industry Data (AID), probably because of weak demand for the current Model S sedan and supply problems with the new Model X sedan.
AID expects Tesla sales to stagnate again this year in Western Europe, before accelerating ahead again in 2018 when the Model 3 is expected to arrive.
AID compiles what it calls exclusive detailed data about Tesla sales in Western Europe, which Tesla declines to reveal.
AID said Tesla Model S sales fell 25.6% in Western Europe last year to 11,757, while sales of the new Model X SUV totalled 3,621.
Tesla’s global sales totalled 75,922 last year.
Norway is Tesla’s biggest market in Europe where sales hit 3,481 in 2016, according to AID. Energy rich Norway has been trying to raise the proportion of electric car sales in the country by offering big subsidies, while penalizing conventional cars with higher taxes and city use restrictions.
AID editor Peter Schmidt said Tesla’s sales last year in Europe suggested to some that its expected big success might not happen.
“Tesla failed to hit the sweet spot of Europe’s would be electric car buyers for the second year running. Tesla’s greatly strengthened armour clearly failed to deliver the expected big punch,” Schmidt said.
New Model X
Tesla has improved the range of choices in its Model S sedan range, and introduced the new Model X SUV.
“But despite last year’s performance, the future looks bright for Tesla in Europe. Before we know it Tesla sales will go up again. Sales this year are likely to stagnate, but I’m really surprised at how well the old Model S has been doing. I had expected a higher rate of cannibalization from the new Model X,” Schmidt said in an interview.
“Model S sales were down about 25% but that is less than I thought. By industry standards the Model S is quite an old model now and Tesla still sold nearly 12,000; that’s pretty good. Tesla is going to stay as a major force in the European electric car market, particularly in the prestige segment,” Schmidt said.
Schmidt said the German manufacturers like BMW, Mercedes, Audi and Porsche are busily preparing Tesla Fighters.
“The Tesla Model S shows what remarkable high quality the company has been able to achieve and it drives and handles very well, even by European standards. Tesla is now working down to the Model 3 which is the right strategy. The Model 3 can do an awful lot for Tesla in Europe, provided they don’t make any big mistakes in things like pricing,” Schmidt said.
The Model 3 is about the same size as a BMW 3 Series with prices starting close to $35,000 before tax. The most powerful versions will compete with hot sedans like the BMW M3 and Mercedes C-class AMG. Eventually there will be a coupe, a cabriolet, a small SUV and maybe a pickup truck. A 65 KwH Model 3 will scorch from rest to 60 mph in 4.4 seconds, will have range of 225 miles and take one hour for a fast recharge.
Bevy of plug-ins
The first pure electric competitor for Tesla in the premium segment will likely be the Audi Q6 e-tron Quattro SUV next year, followed by the Porsche Mission E, and Volkswagen Phaeton battery-only sedan. The BMW i5 should appear by 2020. Meanwhile German manufacturers will unleash a bevy of plug-in hybrid options including the BMW 2 and 3 series sedans and X5 SUV, and the Mercedes C class.
Plug-in hybrids combine a battery with a traditional internal combustion engine. Unlike regular hybrids, they have a substantial range of battery only operation – up to about 30 miles. The battery can be topped up externally too.
“That’s why I don’t expect gains in pure electric car sales this year, with the gains from plug-in hybrids which are being promoted very strongly by car makers. But Tesla is here to stay,” Schmidt said.
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