Luxury car segment

Tesla Model S outsells Mercedes S Class and BMW 7 Series in Europe

Tesla Model 3
Hot on their (w)heels. Source: Reuters

For German luxury automakers, Tesla’s electric car is no longer simply an unwelcome challenger but a full-fledged rival. Although the US pioneer can’t keep up with the Germans in overall volume, the Germans are so concerned that they recently overpaid for a Tesla Model 3 to dissect and inspect its innards.

Last year, Musk’s Tesla sold more of its top-of-the-line Model S in Europe than either the Mercedes-Benz S Class or BMW 7 Series. Model S sales rose a whopping 30 percent in Europe to 16,132 units, while 13,359 S Class vehicles were sold and BMW delivered 11,735 7 Series units, according to the market research institute Jato.

And even in the fast-growing SUV segment, the Californians scored with the Model X. With 12,000 vehicles sold, the Tesla electric SUV was sold about as often as the Porsche Cayenne. The US firm even outpaced the BMW X6. “This is an alarm for the traditional automakers such as Mercedes,” Automotive News Europe quoted Jato researcher Felipe Munoz. “A smaller but smarter brand such as Tesla can beat them at home.”

An anonymous German manufacturer reportedly paid €200,000 to have a Tesla Model 3 air-freighted to Germany.

The Mercedes S Class is Daimler’s flagship model. The German carmaker has China to thank for the fact that it is still the world’s number one model in the segment. There, Tesla is significantly weaker than the German competition.

However, in the US market, Tesla has snatched the top spot. The Model S was sold a total of 28,800 times last year – almost twice as often as the Mercedes competitor.

German carmakers are looking for ways to defend their throne in the luxury segment. Analyzing the competition is one solution. An anonymous German manufacturer paid €200,000 ($247,000) to have a Tesla Model 3 air-freighted to Germany only to then take it apart, newspaper Süddeutsche Zeitung reported. For comparison: A basic Model 3 costs around €28,200.

It is not unusual for manufacturers to buy rival models. In 2016, Audi bought a Model X in the US before it was sold in Europe to give it a test spin at home. A similar project at Daimler turned into a PR nightmare when the manufacturer rented a Model X from Sixt. It not only reportedly disassembled and reassembled the car, it also shipped it to Spain to do the rounds on a Daimler test track. When the car was returned, it had thousands in damage.

About a dozen Model 3 units are said to be in the hands of German manufacturers for their engineers to inspect, analyze and dissect.

What carmakers glean from the Teslas likely helps them with their own electric cars.  Audi will present a new, all-electric model at the Geneva Motor Show in next month and Porsche has announced plans to launch Mission E – a new model S competitor.

Lukas Bay is an editor with Handelsblatt’s companies and markets desk. Stephanie Ott is a writer and editor for Handelsblatt Global in New York. To contact the authors: bay@handelsblatt.com and s.ott@extern.handelsblatt.com.

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