Tesla Inc. has finally received clearance to begin Tesla Model 3 sales in Europe. The electric auto company has cleared the ultimate hurdle and will be bringing its top-selling vehicle to the home turf of Mercedes-Benz, Audi, and BMW.
The go-ahead was issued to Tesla by the Dutch vehicle authority RDW. According to Tesla, it will begin deliveries for the midsize sedan (the long-range battery version) in February. That’s the same variant that was sold first in the U.S.
Chief Executive Officer Elon Musk had described Tesla’s entrance into the European market as a very difficult road ahead. Hence, this European launch is considered crucial by the company. The Model 3 happens to be Tesla’s first car entering the mass market. And in order to deliver lower-priced versions of the vehicle to the market profitably, Tesla is cutting jobs. Profitable sales of the sedan in both Europe and China are the reason why the company isn’t worried about any adjustment in price, according to Musk. The potential price setback is as a result of the U.S. federal tax credit on Tesla purchases as of Jan. 1 halved to $3,750.
Tesla, based in Palo Alto, California, has been seeking to strengthen its grip on the premium car market which is currently dominated by Daimler AG-owned Mercedes-Benz, Volkswagen AG’s Audi and Germany’s BMW AG. With the Tesla Model 3, the American company can seek to achieve that. In its third-quarter shareholder letter, Telsa disclosed that “the midsized premium sedan market in Europe is more than twice as big as the same segment in the U.S.”
As of last year, statistics did confirm that the top-selling luxury car in Europe was Tesla Model 3. It did out stage the BMW 3 Series, the Audi Q5 as well as other well-known car brands. Analysts and industry executives observed, however, that Tesla’s competition last year did cut across traditional categories.
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Elon Musk listed cars like the BMW 3 Series, Nissan Leaf, Honda Accord, Toyota Prius, and Honda Civic as the common trade-ins for Model 3s.
In his report last week, after Toyota Motor Corp, Evercore ISI analyst Arndt Ellinghorst suggested that Tesla is gradually taking away customers from vehicles that people wouldn’t expect. Toyota Motor’s North American chief, Jim Lentz, mentioned the Model 3’s impact on the Prius – a hybrid not marketed to luxury buyers. The Toyota executive stated that a new segment of technology-driven products has been created by Tesla.
Traditional automakers are not letting matters lay low. They are seeking to regain lost grounds with electrified models of their own. Jaguar last year started delivering the I-Pace all-electric sport utility vehicle. Daimler unveiled its EQC electric crossover while Audi released its E-Tron.