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Automotive Blog

Who is buying the Tesla Model S?




Given all the attention recently focused on Tesla, I thought it would be interesting to see who is buying the Model S. Specifically, what are customers trading in for the Model S, or what other vehicles do Model S buyers have in their garage if they are adding to their fleet? The Model S conquest data, derived from Polk new vehicle registration data, are fascinating.

There are two ways of looking at the data. First, the pure conquest data show that the Model S is conquesting owners of Toyota (brand) vehicles more frequently than owners of any other brand on the road, followed by Mercedes-Benz and BMW owners (see table below). The Toyota conquests by the Model S are being driven by the Prius, which is the number one model conquested by the Model S. The Highlander and Sienna are fifth and sixth on the list. Interestingly, the Leaf ranks number seven on the model list, and the fact that the Prius and Leaf both rank so high on the Model S conquest list suggests that the S now gives hybrid/EV-inclined purchasers an opportunity to move up to a vehicle that is:

  • clearly a hybrid or electric, like their current model
  • more luxurious and upscale than their current car
  • more stylish as well

The second approach to the conquest data looks more deeply at the data and by so doing provides a more useful picture of the actual marketplace dynamics. This second approach compares a model’s conquest share of all conquests with the same model’s return to market share of all customers who returned to the market. In other words, is the model in question being conquested by the Model S at a faster or slower rate than the overall rate at which owners of that model return to the market? This calculation results in an entirely different list of top ten makes. The ten brands which are most likely to be conquested by the Model S, when compared to the rate at which their customers return to the market in general, are all either exotic or premium makes. Also, the conquest/return to market ratios for these makes are exceptionally high, suggesting they are much more likely to move to the Model S than the typical customer coming back into the marketplace. These data point unequivocally to the conclusion that Model S buyers are very well-off financially.

In summary, while the simple conquest data suggest the high-volume mainstream and premium makes are losing the most customers to the Model S, a comparison of conquest data with return to market data reveals that, in fact, the exotics are moving to the Tesla model at rates far above those of other brands.

Loyalty Tables for Tesla

Tom Libby is manager, loyalty practice and industry analysis, IHS Automotive   
Posted on February 6, 2014

About The Author

Tom currently uses his passion for the auto industry to serve as a Solutions Consultant for IHS Automotive's Loyalty Practice. His past roles here include Sr. Forecasting Analyst and PolkInsight Advisor (he worked for two years in Polk’s Woodcliff Lake, New Jersey office). Tom's other interests include reading, gardening, sailing and running. Aside from Detroit and New York, Tom has also lived in Los Angeles, Denver, and Boston, where he drove a taxi for two years. Tom has also traveled extensively in the United States and overseas, including an overland trip across Asia after graduating from college. Tom is inspired by people who practice what they preach and enjoys socializing with friends that he's met throughout his career and from school.

Tom is a past member of the Board of Directors of the Society of Automotive Analysts (SAA). During the 2009 calendar year, Tom was President of that organization. He is an active member of the Automotive Press Association, and in the past has written a blog for the online version of the Detroit Free Press. Tom has a bachelor's degree in history from Amherst College, an MBA with a marketing concentration from Columbia University and once served as an Adjunct Professor of Market Research at Pepperdine University in Malibu, California.


Comments

Name: Thomas E Moore
Time: Thursday, March 6, 2014

Interesting and consistent with our purchase of a Model S, after owning a Lexus RX400h (hybrid Toyota, really). Not sure I understand the magnitude of the exotic make numbers, though. I guess if one has spent exotic money on a car previously, it makes a Tesla seem very affordable (and green). The same might be said of folks who have previously paid for college educations for their kids, which some have likened to "driving a beemer off a cliff every year." ;=)



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