April 27th, 2019 by Michael Barnard
Pity the poor ICE sports sedan, unloved new or used compared to the Tesla Model 3
In early January, CleanTechnica published an assessment of the number of Tesla Model 3s available for resale in the USA, the country where most Model 3s had been sold. At the time, 140,000 had been sold new and 78 were for sale on the used market. That was 30–40 times fewer than equivalent Audis and BMWs for essentially the same time period. There were more than 10 times as many equivalent-volume mass-market cars, such as the Chevy Malibu and Ford Focus, for sale. Oops.
A few weeks later CleanTechnica reported on the odd situation of the Tesla Model 3 having better resale value projections by Kelley Blue Book than any other car of any type, but only being granted the top-dog nod in the electric car category.
There were two criticisms of the data set used in the initial analysis that are worth attending to. The first was that legacy manufacturer model years start selling in roughly August of the year before, a trend which will eventually lead to 2040 model year cars being available in 2037. Yes, if this keeps up, you will be able to buy a car “from the future” from legacy manufacturers. Or you could buy a Tesla today. Just saying. But still, a fair point for a car that had been available in volume for months vs cars that had been available in volume for a year and a half.
The second was that used car statistics at that point might be skewed by the federal tax rebate on EVs. If people sold their Tesla Model 3 before the beginning of 2019, they wouldn’t get the rebate of $7,500. This was economically valuable to buyers in a direct way.
The combination of the two potentially invalidated the results, which looked really, really bad for any car manufacturer whose initials weren’t Tesla. CleanTechnica being interested in all things statistical, we’re going to do a quarterly assessment of this key metric to see if it’s as sad for Tesla competitors as it first seemed.
To address the first data concern, we’ll only consider used 2019 cars vs the Tesla Model 3, and look only at Q3 and Q4 2018 and Q1 2019, even though the Tesla Model 3 has been for sale in smaller numbers since Q1, excluding almost 25,000 Teslas. To address the second, we’ll use current used car data as of late April 2019, 3½ months after the rebate was locked in place for last year’s buyers.
Since the Tesla Model 3 is massively outselling all individual models from its primary competitor pool, we’ll also look at more of their cars as well. In January, we only looked at the BMW 3 Series and the Audi A4. This time we’ll look at the BMW 2, 3, 4, and 5 Series and the Audi A3, A4, A5, and A6 trims. After all, that seems to be the comparison in terms of sales. Thankfully, CleanTechnica reports on this regularly, so the data is to hand.
Then we’ll do exactly the same thing as was done in early January. In Autotrader.com we will search for all used and certified Tesla Model 3s for all of the USA as well as all of the 2019-only BMW and Audi options.
If either criticism was correct, we would expect to see a much better ratio of used BMWs and Audis to Tesla Model 3s. And we do. However, it still looks pretty bad for the Teutonic luxury sports sedans.
That’s right, instead of 30–40 times as many owners ditching their German cars than Tesla Model 3s, it’s now only 3–12 times as many owners quickly turning over their cars. The boardrooms in Germany must be filled with
joy concerned men in suits. Oh, wait. That suspiciously round 1,000 for BMW? Autotrader only counts up to 1,000 results and then gives 1,000+. The numbers are actually worse than they look for one of these cars. 12:1 is the best-case scenario for BMW.
In January, we also looked at cars that were selling roughly equal numbers of vehicles, not the kind of embarrassing performances of the BMW and Audi lines. At the time, we looked at the Chevy Malibu and Ford Focus, which sold about the same number of cars as the Tesla Model 3 in 2018. This time we’ll be a bit more precise and look at the last half of 2018 and the first quarter of 2019 for a closer approximation of equality.
CleanTechnica keeps track of the best selling-cars as well as best-selling luxury cars, so we were quickly able to assemble a 3-quarter view of the best-selling cars from July 2018 through March 2019. As it turns out, the Tesla Model 3 was the 6th best-selling car of any type for that period, which is unsurprising given it was verging on #5 in Q3 and Q4 last year, it saw the loss of half of its US tax credit at the beginning of 2019, and Tesla was more focussed on overseas fulfillment last quarter.
This puts it firmly in Nissan Sentra and Nissan Altima range, but that seems unfair to Nissan, so let’s extend this to the Honda Accord and the Hyundai Elantra. What do the used numbers look like for these equivalently selling cars?
This is looking less harsh for Tesla’s competitors. It’s good that we extended it or we would have been left with a skewed impression of all similar sales cars being humiliated, as opposed to just Nissans. The Honda Accord, according to this cut (which excludes 25,000 Tesla Model 3 sales) is doing slightly better than Tesla in terms of satisfied owners. The rest, not so much, with 1.5–5.4 times more of the new owners saying goodbye. If we added the 25,000 cars back in, the Honda is running 1.1 times Tesla’s resale ratio. Both are arguable approaches, but we picked the same time period sales and that’s what we’ll stick with.
Of course, this is one interpretation. The other is that Tesla Model 3s don’t last as long on the used market as most other cars but are snapped up as soon as they appear. That’s still not so good for the others.
And the numbers do look better for other manufacturers than they did three months earlier. Is this a trend? Two data points are insufficient to tell. As more data points flesh out each quarter, we’ll have a better sense.
One other thing that’s worth attending to in this data is that the percentage of Tesla Model 3s up for resale had leapt by 50%, from 0.06% to 0.09%. That’s still a tiny number and it’s a point in time measure, so imperfect, but it’s nonetheless interesting. It might be that the sample was picked from Autotrader at a moment in time when the number of Teslas Model 3s available for resale was unusually high or unusually low. We’ve reached out to Autotrader to ask them if there’s a deeper data set that could be queried or if they had their own perspective to assist in this. And failing that, the way to address this in three months when we return to the analysis is to pick three points in time and average them. If there were significant variance in any points in time, it likely would have shown up between three months ago’s results and these results, but perhaps not.
Regardless, Tesla’s luxury sedan competitors are being put up for sale at an extraordinary rate compared to the Model 3. This is after Tesla owners had bridged the tax credit rebate gap and was only for 2019 model years. That’s closer to an apples-to-apples comparison. And among the similar-volume cars, only one car, the Honda Accord, managed to beat Tesla on this point-in-time sample.
If the number of used cars as a ratio of sold cars is a credible measure of consumer demand, it’s clear that the Tesla is beating its competitors at multiple price points and across the spectrum of buyers. This is a strong indication of consumer desire for the Tesla Model 3 and satisfaction with it.