Buyers driving home Tesla Model 3s are moving up.
In its second-quarter earnings call Wednesday, Tesla executives revealed the top five cars they have taken in on trade for new Model 3s and the results were unexpected.
Rather than other entry-level luxury sedans that form the Model 3s competition, four of the top five cars that the startup automaker took on trade were ordinary sedans or other "green" cars.
In order of the most to least frequent, the top trades from Model 3 buyers were the:
- BMW 3-series
- Honda Accord
- Honda Civic
- Nissan Leaf
It makes sense that electric car devotees driving Nissan Leafs are looking to move up to a more capable, luxurious, longer range car. As the first electric car on the market, the Leaf attracted buyers who had made a commitment to reduce emissions and petroleum consumption who probably could have afforded a more expensive car.
The Prius falls in the same category and may have catered to buyers who had longer distances to drive than the Leaf could muster. The long-range Model 3 may have no problem going the distance with its 310-mile range. Long range versions are the only Model 3s Tesla has built so far.
As the standard-bearer of entry-level luxury cars, the BMW 3-series on the list indicates that the Model 3 may be capturing its intended buyers, winning over traditional luxury-car buyers with its technology, performance, and comfort. After the Tesla Model S quickly became a bestselling luxury sedan after its debut, other luxury automakers scrambled to develop their own electric cars.
An Audi executive said that company was working to build electric cars because Tesla had taken over the German automakers' reputation for innovation by building attractive, compelling all-electric luxury cars.
That the Model 3 could repeat the same performance against lower-priced luxury cars represents some of these automakers' worst fears.
The surprising cars on the list for many are the Honda Accord and especially the Honda Civic.
Buyers trading in Civics and Accords, especially on higher-end Model 3s that start at almost $50,000, indicates Tesla may have succeeded in its mission to build an electric car for the masses with the Model 3 even before it begins building base, $35,000 versions of the car.
That could be a positive sign for the Model 3's and Tesla's success.