Photo: Tesla/Cox Automotive/edited by autoevolution
Tesla sells expensive vehicles. Despite that, considering it a luxury brand is controversial, not only for the quality issues its EVs present but also because nothing about their fit and finish is premium. That did not stop Kelley Blue Book (KBB) from including it among the luxury brands studied by the KBB Brand Watch Luxury Segment Q3 2022 report. Bad news for the company: it scored several negative records.
The first one was how interest in the brand dropped. It fell from 5th place to 6th with 12% of interest. In Q2 2022, it had 15% of interest. The three percentage points drop is “the largest quarter-over-quarter loss.” It is not clear if it was the worst result since the KBB Brand Watch Luxury Segment study started in 2007 or just the worst one in the Q3 2022 report.
Among the Top 10 Models in the luxury segment, the Tesla Model 3 interest dropped 10%. That still made it rank in the 3rd place, behind the Cadillac Escalade and the Buick Enclave. While that may seem like fantastic news, in fact, it shows the Model 3’s lead among luxury cars is seriously threatened, and the BMW 3 Series may soon overtake it. Two other Tesla vehicles in the Top 10 Models list are no longer there: the Model S and the Model Y, Tesla’s most recent offering. It is the first time the Model Y is not there since its sales started on March 2022.
Cox Automotive explained Tesla’s decline was probably due to “intensifying competition,” “price hikes,” and a “lack of new products.” Elon Musk’s controversial “acquisition of Twitter and provocative political comments may also have contributed to Tesla’s drop.” Despite that, the company said Tesla has “fallen before and immediately rebounded.” However, that never happened in a context of weakening demand for the EV maker.
Cox Automotive also said that many Tesla customers do not check for one of its vehicles on KBB, going straight to the EV maker’s website to purchase their cars. That would explain why Tesla presented the largest sales volumes in Q3 2022 among luxury brands. While this makes sense, that should have affected the Model 3 on the study as well if it were true. Yet, the brand is still the leader among luxury passenger cars in KBB Brand Watch. The Q4 2022 report will help clarify that.
Among the Top 10 Models in the luxury segment, the Tesla Model 3 interest dropped 10%. That still made it rank in the 3rd place, behind the Cadillac Escalade and the Buick Enclave. While that may seem like fantastic news, in fact, it shows the Model 3’s lead among luxury cars is seriously threatened, and the BMW 3 Series may soon overtake it. Two other Tesla vehicles in the Top 10 Models list are no longer there: the Model S and the Model Y, Tesla’s most recent offering. It is the first time the Model Y is not there since its sales started on March 2022.
Cox Automotive explained Tesla’s decline was probably due to “intensifying competition,” “price hikes,” and a “lack of new products.” Elon Musk’s controversial “acquisition of Twitter and provocative political comments may also have contributed to Tesla’s drop.” Despite that, the company said Tesla has “fallen before and immediately rebounded.” However, that never happened in a context of weakening demand for the EV maker.
Cox Automotive also said that many Tesla customers do not check for one of its vehicles on KBB, going straight to the EV maker’s website to purchase their cars. That would explain why Tesla presented the largest sales volumes in Q3 2022 among luxury brands. While this makes sense, that should have affected the Model 3 on the study as well if it were true. Yet, the brand is still the leader among luxury passenger cars in KBB Brand Watch. The Q4 2022 report will help clarify that.
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