Tesla has been dominating the electric vehicle market, but it’s now positioning itself as a top contender in the premium vehicle sector as well. In a recent press release, Tesla touted its Model 3 as the best-selling passenger car in the U.S. (in terms of revenue for the latter half of 2018) and the best-selling premium vehicle in the U.S. for all of last year. So, as the brand continues to expand and produce, what advantages can you offer to help ensure continued loyalty from your current customers—and a competitive edge with first-time buyers?
To better understand why shoppers are choosing Tesla, and how other premium brands can effectively compete, AutoLoop recently surveyed 1,000 auto consumers. Given Tesla’s reported performance and technology, 53% of those with a household income of at least $75,000 said they would consider purchasing a model. To no one’s surprise, the most powerful factors influencing those decisions were fuel savings and the positive environmental impact. More specifically, Millennials and Generation-X consumers comprised the majority of those who make finding eco-friendly vehicle options a priority.
Saving the planet vs. saving money
With Tesla, the environmental concern is curbed by concern over cost, though. Even for those with a household income of at least $75,000, the high sticker price is a major deterrent—and many consumers automatically associate the Tesla brand with extravagance already. It’s a valid perception, as the Model S starts at around $85,000. However, the Model 3 price continues to decrease (now starting at roughly $42,000), and consumers are noticing: 77% of those surveyed considered the Model 3 to be affordable.
More eco-friendly options to power sales
All this said, with electric vehicles on the rise and with climate concern becoming more of a mainstream issue, manufacturers and dealerships alike would do well to take cues from Tesla’s success to fuel their own. From a manufacturing standpoint, expanding the electric vehicle offerings can help drive competition with the Tesla brand: Audi just recently aired a commercial during the 2019 Super Bowl promising that one-third of all its new models would be electric by 2025. Several other brands, such as Mercedes-Benz and Porsche, have also released concepts of electric models with estimated production beginning as early as this year. Meanwhile, companies already offering EVs can focus on improvements. For example, the comparably priced BMW i3 is available now but falls short in terms of driving range on a single charge.
Showcase specific advantages to capture buyer interest
From an individual retailer standpoint, stores can help offset the Tesla appeal by bringing their customer’s attention back to the advantages of their own models—along with the less-expensive price tag (if applicable). Particularly with Millennials and Generation X buyers, focusing on the many environmental benefits of hybrid vehicles, for instance, is smart. And offering gas perks as part of the vehicle purchase works to proactively address the need for fuel savings to help win over those prospective buyers.
As for the higher end, luxury dealers can emphasize the numerous advanced technology features of their latest vehicles, such as infotainment, semi-autonomous driving features, collision-avoidance systems, and much more. Today’s models provide virtually limitless options for consumers. And the truth is, if competing premium brands can offer more affordable, environmentally sound options complete with the latest intelligence and maximum driving range – all without sacrificing the eye-catching designs that attract buyers in the first place – Tesla may find itself in need of a recharge.
Insights | January 05, 2021