The Strategist

Tesla dominates US luxury car market

10/13/2016 - 16:44

Tesla Motors, even when faced with some problems in their activities due to the ever-expanding ambitions, continues to lead the market of luxury-class cars, reports Bloomberg.
Sales of Tesla S model jumped 59% in the III quarter of this year compared to the same period last year. Thus, the company has consolidated its leadership in luxury car sales according to Tesla’s report. Previously, the company did not disclose performance of III quarter to competitors.

According to Tesla, the company is now responsible for a third of cars sales in this segment. Tesla’s nearest rivals are recently updated BMW 7 Series and Mercedes-Benz S-Class.

Tesla sold 428 thousand cars a new X model in the US market of luxury SUV 5, increasing its market share to 6% in the III quarter. Sales growth followed after revocation of this model in April of this year. According to Tesla, model X sales overtook Porsche and Land Rover, but lagged behind Mercedes, BMW, Cadillac, Volvo, Audi and Lexus.

Elon Musk called upon the staff to increase sales in the III quarter to reach profitability before Tesla will begins to increase its spending.

Tesla is preparing to release a cheaper luxury sedan and acquire SolarCity company for about $ 2.8 billion. Experts point out that acquisition of SolarCity, which has not yet reached profitable level, create additional financial hardship for Tesla, which itself is waiting for output to self-sufficiency until 2020. The company also heavily invests in R&D and expansion of production, including construction of a plant in Nevada worth $ 5 billion.

Model 3 will be one of the most affordable luxury cars of entry-level. If Musk achieves projected production level of 500 thousand cars a year by 2018, the automaker will take all three classes of the luxury car segment.

Meanwhile, production in the III quarter increased by 37% compared with 25,185 cars in the II quarter.

According to Tesla, sales and production volumes in the IV quarter will exceed the III quarter performance, despite the fact that the IV quarter has fewer working days.

In addition, Tesla informed investors that, starting from III quarter, the company does not intend to include figures for revenue and other indicators calculated not on US GAAP in its financial statements.

Tesla’s sales are growing much faster than that of leaders of the American automobile industry - Ford or General Motors. However, volume of supply continues to fall short of Tesla’s forecasts.

The quarterly results show that the first fatal accident involving an auto-piloted Tesla, has not affected sales. In June, electronics in one of Tesla car malfunctioned, and the car hit a truck at crossroads. The driver died at the scene.

Now, the "autopilot" service cannot completely control a vehicle without a driver. A self-driving Tesla can change lanes on the road and respond to changing traffic situation.