Tesla Is Now America's Number One Premium Automotive Company, Outsells BMW, Lexus In Q4

For the first time ever, Tesla sold more vehicles than BMW and Lexus in a quarter in the U.S.Atherton Research

Despite legal and financial struggles, Tesla managed to cross the 2018 finishing line well ahead of all its competitors in the U.S. premium automotive market, including prestigious carmaker brands such as Mercedes-Benz, BMW, Lexus, Infiniti, and Acura.

Today, the Silicon Valley automaker disclosed that it delivered more than 90,000 vehicles for the last quarter of 2018—8% more than in the third quarter, which was already an all-time-high for the company—including 63,150 Model 3 (+13% from Q3), 13,500 Model S, and 14,050 Model X vehicles.

As previously reported, Tesla outsold Mercedes-Benz in the U.S. in the third quarter and my company, Atherton Research expected Tesla to also outsell BMW in the last quarter of 2018 as the American car company accelerates its production cadence.

Well, I can confirm today, exclusively for Forbes readers, that Tesla is officially the #1 premium automotive company in the U.S. outselling BMW and Lexus by a wide margin.

Our estimate indicates that the Bavarian luxury car maker sold about 80,000 BMW-branded vehicles (cars and SUVs) in the final quarter of the year, around 10,000 fewer than Tesla—the German automaker is expected to announce its official sales numbers in the coming days.

And the gap between the electric car maker—which by the way also sells solar panels and clean energy storage—and its competitors is widening as  Tesla continues to increase its production rate, expands to international markets (deliveries to Europe and China will start next month), offers a leasing option for the Model 3 and reduces the price of its vehicles (read more about it below).

In 2018, Tesla delivered more than 245,000 vehicles (145,846 Model 3 and 99,394 Model S and X), almost as many vehicles as it did in all its prior years combined.

In a statement, the Palo Alto-based carmaker confirmed that last year was also the first time in decades that an American car – the Model 3 – was the best-selling premium vehicle in the U.S. for the full year, "with U.S. sales of Model 3 roughly double those of the runner-up."

Tesla also announced that starting today, it will reduce the price of its Model S, Model X and Model 3 vehicles in the U.S. by $2,000 to partially absorb the reduction of the federal electric-vehicle (EV) tax credit, which, as of January 1st, dropped from $7,500 to $3,750.

Atherton Research's Take

As we expected and wrote two months ago, Tesla has now become in the fourth quarter of 2018 the number 1 luxury automaker in America both in sales volume, outselling Lexus and BMW, and revenue—a remarkable milestone, for a 15-year-old company with just 3 models and no dealer network.

For 2019, we predict that Tesla's growing sales trend will continue and that the Silicon Valley automaker will outsell all its competitors in the U.S. premium vehicle category for the full year.

As Tesla ramps up production and deliveries in Europe, German automakers including Mercedes-Benz, BMW, Audi, and Porsche, will start feeling intense competitive pressure in their home market as they struggle to transition to full-electric vehicles.

Indeed, despite announcing billions of dollars of investments in electric technologies over the next few years, we don't expect German automakers to deliver anything that will seriously compete with Tesla's current all-electric and semi-autonomous vehicle lineup before 2020 at the earliest.

And that's before any additional price reductions and innovations Tesla could announce in the meantime.

Finally, although we believe that the $2,000 price cut that Tesla announced today will affect the bottom line of the American automaker in the current first quarter of 2019, it will also help keep demand strong.

The federal EV tax credit will drop again on July 1st, from $3,750 to $1,875. By then, we expect Tesla to release the long-promised $35,000 Model 3 base version alongside more details about its all-electric pick-up truck and the Model Y crossover, which the final prototype was approved for production last October.