Tesla overtakes Mercedes in key EU segment

TESLA’S Model Y has become Europe’s best-selling vehicle in the premium, medium-sized SUV segment for the first half of 2022 knocking the Mercedes-Benz GLC from its erstwhile top spot.

Coming out of Tesla’s Berlin and Shanghai plants, the Model Y could also finish the year as Europe’s number one premium vehicle… supplanting Audi’s A3.

According to Dataforce automotive statistics, market acceptance and corresponding strong sales of the Model Y point to it outselling A3 which has been dominant in the European market until now.

“The Tesla Model Y has been very successful in the European market and it’s set to grow further,” said Dataforce senior automotive analyst Benjamin Kibies.

According to a report published in Automotive News Europe (ANE) this week, Tesla’s medium-size electric SUV has been progressing up the premium sales rankings since its gradual rollout across Europe started last year.

The Model Y was Norway’s top-seller in the first six months while in June it topped Sweden’s sales charts and finished number two overall in the UK.

Dataforce’s statistics show the Model Y recorded 41,851 sales in the first six months, beating the GLC (40,554) but the figures do not include all European countries such as Finland and Portugal.

The BMW X3 was third with 31,138 and the Volvo XC60 fourth with 27,836 sales.

Tesla’s robust sales performance helped push total sales in the premium midsize SUV segment above 250,000 for the first half of 2022 representing a rise of 18 per cent year on year.

Model Y’s success has impacted other sub sets in the market with important impact diesel which is no longer the dominant fuel. In the first half of the year diesel tied with electric on 32 per cent market share apiece.

The ANE report says almost half of all EV sales (leaving out PHEVs and hybrids) in the segment came from the Model Y while Audi’s combined EV volume of 30,612 units, led by the Q4 e-tron, accounted for a third.

Volkswagen Group has a different strategy splitting its offerings between coupe-styled Sportback versions of both the Q4 and the slightly larger e-tron. This has the effect of giving wider German car-maker coverage and theoretically greater sales.

The BMW iX3, BEV out of China, was number four in the EV sub set while fifth was the Mercedes EQC. Jaguar’s i-Pace was rear gunner in the segment as the slowest-selling EV in the category with a volume of 3528.

Though wavering in sales in the face of pure electric vehicles, plug-in hybrids (PHEVs) were another key drivetrain sub set in the segment, taking a 19 per cent share during the first half of the year.

Sales were led by the GLC at 14,379, with Volvo XC60 plug-in hybrid second with 9,747 units, followed by the BMW X3 at 9568.

Other plug-in hybrid variants coming in the segment are the Citroen DS 7 Crossback, Lexus NX, Audi Q5, Range Rover Velar, Land Rover Discovery Sport and Jaguar F-Pace.

According to ANE’s report, petrol ICE models accounted for 15 per cent of sales in the segment, led by the Porsche Macan, which, according to auto industry analysts is held back in sales by not having a plug-in hybrid variant.

In the hybrid sub set, the Lexus NX was on top of the sales chart but is the only hybrid as opposed to a PHEV. The Lexus hybrid chalked up some 3,206 sales in the first half of 2022 compared with 2,802 sales of the SUV’s plug-in hybrid version.

In the contest to become Europe’s best-selling premium car for 2022, the Model Y has to overtake the Audi A3, which has first half sales of 51,994 in the compact premium segment. Other contenders are BMW’s X1, the Mercedes-Benz A-Class, BMW 3 Series and Mini hatchback.

Apart from the Mini, the other four vehicles suffered sales declines in the first half of the year.

Though Tesla is in a good position in this particular segment, its continued success depends on some unknowns… how many vehicles it can build and customer demand, the former impacted by component supply and transport issues, the latter by global financial uncertainty and rising inflation.

According to the ANE report, Tesla is ramping up production capacity at its Gruenheide factory for the Model Y, with CEO Elon Musk promising to raise the German plant’s weekly output from 1000 in June to 5000 vehicles “by the end of this year or early next year”.

Mr Musk further promised at a recent Tesla financial briefing that the production number would increase to 10,000 a week by the end of next year. Tesla has said it wants to produce 500,000 cars a year in Gruenheide.

The German Tesla plant builds high-power Performance versions of the Model Y, with the standard dual-motor models coming from the Shanghai plant.

According to ANE, currently the split is 20 per cent Gruenheide and 80 per cent Shanghai.

The Gruenheide facility is being updated with the objective of improving (reducing) the time spent at each assembly station to 45 seconds from 90 seconds.

According to Dataforce statistics, Model Y’s success has come at the expense of the Model 3, which had a 39 per cent sales decline in the first half to 38,455 units, dropping it behind the BMW 3 Series in the midsize premium segment.

According to the ANE report, Tesla’s single model available with just two specifications is so far beating the segment strategy of its premium rivals to offer different body styles and up to four different drivetrains.

An outright win for Tesla in the segment for the year would no doubt cause rivals to question whether they need such complex and varied portfolios.

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