As electric vehicles sales drop, Tesla’s luxury consumer base and attractive design drive growth By KathleenBurke Reporter The Tesla Model S has a special feature in addition to its autopilot and retractable door handles: Its sales are immune to plunging gas prices. As more hybrid and electric vehicle drivers upgrade to SUVs with improved fuel efficiency, Tesla TSLA, -1.91% has managed to maintain and grow its customer base for its luxury electric vehicle. The auto maker’s resilience to this fast-growing trend can be attributed to a sporty design and a consumer market that can afford a $75,000 price tag, says Jessica Caldwell, director of industry analysis at automotive research site Edmunds.com. “Tesla proves that if you provide a sexy-looking EV people are going to flock to it,” she adds. More affordable electric vehicles are experiencing the opposite effect. In November, the electrified vehicle segment made up only 2.2% of the light vehicle market (which excludes large commercial trucks) its lowest share of the market since 2011 and down from its peak of 3.7% market share in 2013, according to Caldwell. Meanwhile, SUVs had a blockbuster month, holding about one-third of market share. Read more: Something baby boomers and millennials agree on: SUVs Gas prices aren’t helping the segment. The average price for regular gasoline was $2.260 a gallon in November, down from $2.997 in November 2014, according to the U.S. Energy Information Administration. See also: One benefit to plunging oil: lowest gasoline prices in nearly 7 years Though Tesla doesn’t report monthly sales figures, it reported a record number of deliveries — 11,603 — in its third quarter earnings in November, and electric vehicle blogsestimate that the company sold about 3,200 vehicles in November. That is up from an estimated 1,200 in November 2014. Tesla didn't respond to a request for comment. But not everyone has fared as well as Tesla. Electric vehicle sales are down 20% this year, excluding Tesla sales, says Tim Fleming, an analyst at auto site Kelley Blue Book. InApril, Edmunds reported that 22% of drivers who traded in their hybrid or electric vehicles bought a new SUV, nearly twice the amount of drivers who switched three years ago. Only 45% opted to stay with alternative fuel vehicles, the first time that figure has dipped below 50% since it was recorded. “The downturn is alarming,” Caldwell says. “It’s a situation that needs to be improved if electric vehicles are expected to drive the U.S. car market.” Design is more important to consumers than sustainability, Caldwell adds, and the market is trending toward larger crossover vehicles. This preference could continue to affect sales of compact electric vehicles like the Nissan Leaf and Chevrolet Volt, she says. Leaf sales were down more than 60% in November, from 2,687 to 1,054, while the Volt, which was recently redesigned, saw its best November with sales of 1,980 units, but is still down about 23% this year compared with 2014. (General Motors wasn't immediately available for comment.) A Nissan spokesperson says the low sales were due to the transition to the 2016 model year Leaf on dealer lots, and the company expects sales to pick up once the vehicles are fully stocked. The selection of affordable electric vehicles is also pretty slim. “In terms of vehicles, there are not a whole lot of electric cars out there,” Fleming says. By going after a higher price point, Tesla has established itself as the luxury electric vehicle with a base price of $75,000 before state incentives and tax credits. Lower price point shoppers are limited to cars like the Leaf or the Volt, which have manufacturer retail suggested prices of $29,010 and $33,170, respectively, while gasoline-powered alternatives like the Honda Civic, which retails at $18,640, improve fuel efficiency and are a more affordable option. The lack of variety in the segment is likely to change over the next decade, Fleming says. As the 2025 deadline for the Environmental Protection Agency’s renewed emissions standards requiring a fleet average 54.5 miles per gallon for auto makers nears, companies will have to turn to electric and alternative fuel technologies to improve efficiency. “Every manufacturer is investing in [alternative fuels], there isn’t any getting around that,” Fleming says.
show me the Tesla buyer that is trying to save a little on his weekly gasoline bill. They don't even care if it takes the dirtiest energy to generate electricity for their new toy.
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It is funny that you can't buy a Tesla just because you think its a great design, or you like the performance, or you think it makes you cool, or any of the other myriad of reasons that everyone uses to chose between the myriad of other car choices. It always has to come down to some derivation of "why would you buy that, you won't really save money". Who ever throws gas mileage around when discussing if they should by a BMW or Mercedes? Why does it have to be the prime factor with a Tesla. And no, Tesla is most definitely not marketing to that, they hate the gas comparisons as much as I do.