I follow current industry news regularly, but I know that’s not exactly CC’s main mission. Nevertheless, it’s pretty fascinating to see Tesla not only taking the luxury brand crown so far this year, by a big margin and up 50% from 2021, but to also see that every other luxury brand is down from 2021. And the excuse that it’s all because of the supply chain issues is not working so well for me anymore.
I was interested in the cumulative losses (and gain for Tesla); it’s a negative 217k for all the brands except Tesla, which gained 116K.
Where did that 217k go?
Undoubtedly a good portion went to Tesla, and probably also to pickups, which the luxury brands don’t offer.
Undoubtedly a good portion went to Tesla, and probably also to pickups, which the luxury brands don’t offer. Given the very high transaction prices on pickups, they obviously compete with traditional luxury brands, which is why these categories mean less than ever. But clearly the luxury brands are hurting a bit.
On to EVs;
Not surprisingly, Tesla dominates the top ten, with all four of their five models in the top five. Only the Mustang Mach E is there, just barely outselling the much more expensive Model X. Meanwhile, the Model Y is becoming a major global phenomenon. It already is the globe’s highest revenue generating single model, and is on a trajectory to become the world’s best selling car, period, sometime in 2023, when it will snatch the crown from the Corolla.
Speaking of, Toyota is of course not on this list, as their only current EV, the bZ4X, had to be recalled because its wheels kept wanting to come off. Very embarrassing. The problem has been fixed, but Toyota has not yet even begun to ramp up its production to competitive levels. In fact, they recently announced that they were going to have to completely rethink their $38 billion EV strategy, because they’ve conceded that they grossly underestimated the growth of EV sales, and the bZ4X is too expensive to build because it was designed to be built alongside IC cars, and not in dedicated EV production facilities. They’re going to either have to redesign the new e-TGNA platform or create a new one. And to think that Toyota was once the darling of the green crowd with their hybrid Prius.
Hyundai Motor Group (Hyundai, Kia, Genesis) is #2 EV seller; their Ioniq5 and EV6 alone sold over 35k units, handily outselling Ford overall. Meanwhile, VW’s ID4 is lagging, down 8.5% and Porsche’s EVs are down 23%. But the real loser is Jaguar, down 71%. Their iPace is quickly becoming irrelevant.
Tesla does so many things differently, and I would love to know if that applies to the cars’ uses of computer chips. Do they have some kind of high-level supplier relationship that gets them more product? Do they use a grade of chip that is higher or more complex than the cheap, commodity style of chip favored by the auto industry and that seems to be the biggest supply problem? Or is it that they do not face pressure to divert scarce chips into lower-cost vehicles that make up the bread and butter of several other manufacturers?
Whatever the answers to these questions, the company seems to be doing something right.
The next big question is whether Elon Musk’s polarizing foray into social media is going to create a Henry Ford problem where groups of people will refuse to buy his vehicles for no reason other than that Musk built them. I don’t see that as being a huge factor, but it might still become a factor – especially as more alternatives to Tesla become available.
Other than Tesla, manufacturers rely on numerous electronic systems created and supplied by vendors. This results in a hodge-podge of hundreds of micro-processors that have to be coordinated, and creates numerous vulnerabilities, including having suppliers not be able to provide their little part of the electronic eco-system. That’s why manufacturers have had to throttle production at times, or store thousands of cars with one or two systems missing.
But these chip issues have apparently been largely improved; GM has finished up the tens of thousands of trucks it had stored and delivered them. Dealer Inventories are building steadily, although not equally across all brands or models.
Meanwhile, Tesla went a completely different route and created a single unified software that runs everything, not relying on vendors. That means drastically more centralized processing, which allows over-the-air updates on any function controlled electronically (most, nowadays). The big advantage during the chip crisis was that Tesla could rewrite its code to allow substitute chips. This was a real boon, and only possible due to them having written all of the code in their cars. In that way, Teslas really are like a cell phone, whereas other cars are a giant spider web of dozens of different systems and processors that cannot be replicated or modified.
As to Musk and Ford, there are of course numerous similarities. Both are/were narcissists, egomanics and megalomaniacs. And those qualities were greatly inflamed after their initial successes. The outcome with Ford was of course well known. We’re watching the potential outcome for Musk and Tesla in real time.
As to your final point, yes, there’s very clear evidence that an increasing number of people will not buy a Tesla because of Musk, who’s become increasingly toxic. How much of a factor is that currently? Hard to say.
One of the reasons Teslas are still selling so well is because they’re much more available than very compelling alternatives like the Ioniq5, EV6 and MachE. These have very long waiting lists and typically high markups. Some Tesla models are available in fairly short time, and that will likely improve as the Texas factory ramps up production.
I feel privileged to be able to watch all this unfold in real time; it’s the biggest upheaval in automotive history since…Henry Ford and GM’s subsequent dominance.
And no; I don’t make long term predictions. 🙂
A bit of history regarding Mr. Ford. He ran for the US Senate in 1918, endorsed by Woodrow Wilson. He barely lost to Truman Newberry. Newberry broke campaign finance laws, but evidence showed he was unaware of these laws. The Wilson DOJ launched investigations of Senator Newberry and indicted him on nine counts of breaking campaign finance laws. Newberry was convicted, but the SC overturned the conviction. Years of bruised feelings over it. Ford had hired 40 investigators to give the Wilson DOJ evidence. While Ford did not break campaign finance laws, he still spent hundreds of thousands of dollars investigating Newberry after the election with the help of the Wilson administration. Senator Newberry stepped down a few years later.
So Ford had an entire GOP angry over his, and Wilson’s involvement in the election. That burned a lot of bridges with buyers. Ford ended up being coupled with Wilson and both were politically reputiated in 1920.
I find it interesting that a Princeton college president president would be comfortable with a Michigan farm boy industrialist. Their educations couldn’t have been more different.
Well, they were both racist white supremacists – whether or not one wants to excuse that as being a product of their time. So, I’m not sure that their educations had that much to do with that.
Fortunately, history moves on.
JP: You have some great thoughts there. I’m in the auto industry on the retail side. Even though Mazda only has the one EV (MX30) which is/was a poor attempt into the EV segment, I haven’t seen one on the lot or shipped in nearly a year. Our thought is that Mazda is so embarrassed by it’s attempt that they just decided to stop building them. Outside the MX30, we are still having trouble getting Mazda (ICE) inventory as well. With the Volvo, getting our hands on an EV or PHEV is difficult at best. We are being told it’s still the chip’s issue. That may also address Paul’s thought on the chips, but would not explain how Tesla seems to be avoiding the issue.
Now let’s talk Tesla. I love that Tesla is what I consider an American company. I also love the move to EV’s although I don’t plan to get rid of my 1988 Cimarron any time soon. I also like the model 3 for the style. HOWEVER, there is no way on earth I will buy anything from Musk. I find him to be one of the most disgusting figures out there, close to a certain orange hue Florida resident that shall remain nameless. Even if I was willing to buy something from Musk’s company, there remains two things that would still keep me from buying the model 3: You have no choice but to take a car with the glass roof. Second, they only come with the huge tablet stuck to the dash. Both are huge fails and deal breakers for me.
Thus, I placed my order for a more basic Chevrolet Bolt 1LT last week. The fact that it’s from an American brand, assembled in the US, doesn’t force me to take a sunroof of any sort and the screen are all well integrated into the dash made this an easy choice. The fact that the MSRP with the 3 options I wanted comes to $28,285.00 was the closer. If my timing is correct, I hope to have the car by April of 2023.
It would be interesting to see whether members of the “other side” who generally was derisive of any electric car may start buying Teslas in droves purely on political grounds…
Tesla has created its own thing. It has become iconic. We’re still seeing a demand for EVs and Tesla is almost synonymous with EVs. Like Kleenex. Tesla is a bit insulated right now.
2022 is the year we watched our 401Ks lose thousands. This market is impacted by that. Many retirees still buy “their fancy dream car” off of their 401s. Now they are holding back from buying.
As to trucks – sure, that effected this, but wouldn’t we see Lincoln and Cadillac less effected since they carry those in their lines?
I agree I think many of those “luxury” brands lost ground this year because people have decided to play the waiting game in the face rising interest rates and falling stock prices.
I was just commenting to my car-centric nephew this morning that at my school, a private program in an affluent area of a large city, there is quite a rash of recently acquired top-trim SUVs (foreign and domestic) in the car pool line. I challenge you to show me the luxury difference, at least interior wise, between the Tahoe High Country or Denali and the Escalade. I guess at least they kept the price below 6 digits. Meanwhile, it looks like I’ll be waiting 10-12 months minimum for my ordered $35k Maverick hybrid to grace the parking lot.
Not a great time for us proletariat folks to have to buy a car…
“….but I know that’s not exactly CC’s main mission.”
Keep it coming! – This stuff is always informative and much appreciated Paul.
The fact that Tesla outsells all the other EV(s) could simply come down to infrastructure. They have the best charging network. Sure, you can charge your car at home, but if traveling and wanting to be able to charge your EV on the fly? Tesla wins hands down.
These articles are great, Paul.
I’m not sure why I can’t get on the Tesla Love Boat. Maybe it’s because I run hot and cold on Elon Musk; maybe it’s because of the six Tesla’s I’ve had the opportunity to drive, none really impressed me except for thrust. If I HAD to buy an EV it would be the Mach-E or Ioniq6. But I do very much respect the time, energy and planning that has gone into the Tesla charging structure.
Meanwhile, old coot that I am (born in the late ’50s), I know it’s been so for a long time but it still surprises me that Cadillac is ranked 6th. My parents and grandparents’ generation would be flattened by that newsflash.
Even though my next new vehicle will most likely be an EV (although that won’t be for several years), I too am not really in love with Tesla. Maybe it’s just me being contrarian and not wanting the same thing everyone else has; at least here in Northern California the Model 3 is basically the Camry of EVs, they’re freakin’ everywhere. But I’m also not really a fan of their minimalist philosophy of using one screen for everything. I’m sure I’d get used to it, but I’d still prefer an actual gauge cluster in front of the driver.
If I HAD to get a new vehicle tomorrow, the Polestar 2 would be my top choice, although the Ioniq and Kona would be high on my list as well.
I’m quite certain why I won’t get on the Tesla Love Boat: their cars give every appearance of being blatantly noncompliant with safety standards in ways I can easily see—substantial ways; I’m not talking about a typeface one point smaller than specified on a tire size label or something like that. That, together with Musk’s long track record of thumbing (or other-fingering) his nose at regulators worldwide in re his cars and his factories, makes me pretty sure the cars are also noncompliant in ways I can’t see. I want no part of that.
And even if I disregard any question of compliance, the cars have demonstrated themselves to be just plain unsafe in ways I will not accept. Musk’s florid claims aside (n times safer than any other car ever in the whole wide world; “autopilot”, “full self driving”, etc), and disregarding stupid behaviour by Tesla “owners”, Teslas get in kinds of crashes and dangerous incidents that other cars do not. That’s not okeh by me.
I put “owners” in quotes like that because remember when Musk came over all magnanimous and temporarily undid the software battery capacity lockout on Teslas bought without paying extra money for a “larger” battery (which was really just the same battery minus the software lock) so they could be driven out from a hurricane zone? That was nice of him, eh? Yeah, now remember what happened when some guy tweeted something about their Telsa that Musk didn’t like? Musk threw a tantrum and used that same over-the-air capability to remotely brick a bunch of features the guy had paid for.
Then there’s the matter of the steering yoke (Musk: “round wheels are boring”), which even some Tesla fanboys admit is bad and dangerous—a correct assessment shared by serious, legitimate auto testers—and numerous other kinds of terrible ergonomics dictated by Musk’s whim.
There’s also build and fit/finish quality that would have raised eyebrows unfavourably on an American car in the 1970s.
There are a lot more reasons I’ll be avoiding Tesla cars. Many of them are covered in Ed Niedermeyer’s excellent and rigourous book, Ludicrous: The Unvarnished Story of Tesla Motors.
(Also, Musk is a bad man and I will not be a party to his further enrichment)
I suspect I’m probably not on “your” side of the political map but broadly agree with what you said, and I have no Tesla on my horizon. All modern cars are invasive of one’s privacy in one way or another but with Tesla all red lines have been breached. I suspect you and I would happily live with something from the 60s, suitably updated, but this is becoming more and more difficult in this regulation-obsessed world…
They’re not quite “classics”, but the values of early Tesla cars are on the rise. Bring a Trailer has auctioned 11 Tesla Roadsters so far this year, with an average selling price north of $127k. Perhaps they’re in the pre-Classic phase.
There are only a few Teslas in NOLA, and even fewer other EVs on the road around here. Navigators and Aviators rule the roost while bland looking Cadillacs and ugly Infinities battle it out for top three.
Another luxury brand missing is Land Rover which recently moved its franchise from a side street to the front of a local dealership and is now populating suburbia like crazy 😛.
Honest question here. Why has Tesla YTD stock price declined so much? Stock price history appears to contradict the very positive luxury registrations graph.
Because its price was completely disconnected with reality. It’s just coming back to earth. Not too sure it’s all the way there yet. It could go lower.
Tesla investors are very unhappy about Musk buying Twitter. He just unloaded $4 billion more in Tesla stock in the past three days. He’s already sold quite a bit earlier this year.
I also think the long-delayed Cypertruck tease will flush out underwhelmingly. It’s the Isuzu Vehicross of its time.
It will be a big hit at first when everyone who wanted one (and can afford it) can finally buy one, then its sales will stagnate as it’s too weird for the masses. See AMC Pacer sales figures by year.
Tesla, beating out Mercedes, BMW and Audi in China, has been top “luxury” band since yr 2020. The significant is China is the world largest vehicle market, and newly riches love the luxury item as status symbol. Even that top spot was achieved via Model 3 made in China. But Elon bet in Shanghai factory paying off, it is able to produce close to one million vehicles annually for both China and export markets. Only big drawback is the new geopolitical tensions between US and China.
I approve the vast majority of positive and disruptive changes Tesla has brought about to the industry. However I won’t recap them as Paul noted most of them in his first reply. The blatant disregard for safety protocol Daniel Stern also noted has opened my eyes. I was aware of some but not to that extent. The other question is for the Board of Directors. At what price does its stock need to dip to before they vote him out? My vote would be to demote him to Chief Technical Officer contingent upon his ability to keep Tesla out of the news. If he can’t do that then show him the door. I think we know how long he would last in that role.
Yes, well. There’s a dude with nine (as in, three times three) shares of Tesla stock, who is successfully-so-far suing Musk in Wilmington, Delaware on grounds of his insane compensation package, which gave him his instant twelve-digit ‘worth’, was not in Tesla’s best interest. Musk will have to testify this coming Tuesday.
If the lawsuit is successful, Musk’s Tesla stock grant will be rescinded. The Tesla board, you see—handpacked with Musk acolytes—sold him literal billions of dollars’ worth of Tesla stock for pocket-change money. That stock grant was contingent on a variety of milestones being reached, such as putting the Model 3 into production in 2018 (which is why a number of Model 3s countable on one hand got made in 2018—no, no, no, they were totally production cars! They weren’t hand-built showpieces at all, it’s just that Tesla were in “production hell” at the time!).
If the lawsuit article 1; article 2 goes in the nine-shares stockholder’s favour, it stands to retroactively vacate that decision to grant tens of billions of shares to Musk.
So there’s that.
Thanks for the links Daniel.
Cue Irwin Mainway