Model 3 owners are ditching BMWs.
Tesla's production delays surrounding the Model 3 may have caused headaches for investors, anxious customers, and even CEO Elon Musk, but those days appear to be over. The era of the Model 3 is underway and the all-electric sedan continues to be a phenomenal success. A fascinating new study from Bloomberg has gone into depth about not only the EV sedan's sales success but, equally important, who is buying them and what brand is suffering the most from the Model 3's success.
One important fact: no other sedan in America is generating more revenue right now than the Model 3.
Costing around $50,000 on average, the Model 3 continues to significantly dent BMW 3 Series and Mercedes-Benz C-Class sales by outselling them both. Bloomberg asked 5,000 Model 3 owners questions about their previous cars and, interestingly, whether or not they'd buy them again. Which makes and models did these Model 3 owners trade-in?
Examples include the Honda Accord and Civic, Toyota Camry, and the Mazda 3. But the greatest percentage of the Model's total sales came from former BMW drivers, as the responses indicate. Tesla, amazingly, has succeeded in breaking so-called brand loyalties in a record period of time. Often times, brand loyalties are passed down from generation to generation. But thanks to continued hype, Musk constantly being in the news (for better or worse), and environmental concerns, drivers from various backgrounds and incomes want to try something new.
"I've owned three BMW 3 Series and was a diehard BMW fan," one Model 3 owner responded. "The Tesla blows those cars away." Not everyone can afford a BMW, but the Model 3 is still affordable enough for many mainstream buyers. "I'm not rich, I'm an ordinary man with an ordinary job. I am exactly the buyer Elon Musk hoped to attract," another owner responded. Tesla does not even spend money on advertisements, relying instead on product events, social media, and referrals.
One data study shows BMW is the most vulnerable of all major luxury brands, including Audi and Porsche, to lose customers to the Model 3. The Model 3 has "forever changed… expectations for what a car should be," another owner said. Others appreciated Elon Musk's social media activity and outgoing approach. "I have no clue what the head of Ford looks like. And I only know Nissan because he went to jail," another owner wrote. BMW also failed to push its i brand, mainly the i3, as it should have. The upcoming i4 will compete head-on with the Model 3, but for another Model 3 driver and former i3 owner, it's too little, too late.
The Tesla Model 3 has proved the naysayers wrong. It has proved mainstream automakers wrong. As much as they'd like to deny it, the Model 3 is now their prime target, but winning those customers back could be an even greater challenge.