Top 10 Reasons Why Tesla Offers A BMW Experience At A Toyota Price
In this article, I explain 6 reasons Tesla matches or exceeds the luxury features of BMW, Mercedes, and Audi; and also 4 reasons why Tesla vehicles as affordable as Toyota & Honda vehicles. Tesla needs to get the word out on this, since it is having some difficulty selling its cars at current prices as supply increases. Instead of lowering prices, they can just educate consumers that the cars are already a fabulous value.
This is the brand specific version of “A luxury car at the price of a regular car.” It isn’t entirely different from why I bought a V6 Honda Accord in 1999. I test drove a $45,000 Lexus GS400, the $20,000 4-cylinder Accord, and the $25,000 V6 Accord. I assessed that the V6 Accord with the EX package had 90% of the luxury of the $45,000 Lexus for a little over half the price. That was a great purchase and my favorite car ever (up until I bought a Tesla Model 3 in 2018).
For Tesla to make the claim that you get a luxury car at a mainstream price, Tesla needs to support both statements, that Tesla offers luxury features and costs the same (or less) than mainstream or regular cars.
Luxury Features
So, what is the definition of a luxury car? According to Wikipedia, “A luxury car is a car that provides above-average to high-end levels of comfort, features, and equipment.” I would argue that buyers are looking for the following 6 features when they decide to move up from a regular car to a luxury car.
- Powertrain: Buyers are looking for above-average power and smoothness. This helps in both everyday merging into traffic and passing a car on the highway, and also if you want to take the car to the track or enjoy twisty mountain roads. Tesla cars have very smooth motors that provide 0 to 60 mph acceleration in the 2 to 5 second range, which is equal to or better than a BMW, Mercedes, or Audi. They typically are substantially faster than the near luxury Lexus, Acura, Infiniti, and Genesis brands that typically offer times of 5 to 8 seconds. Some of these gas cars even have the dreaded continuously variable transmission (CVT), which is notorious for its high droning sound.
- Balanced handling: Ideally, a 50/50 front–rear weight distribution and rear-wheel drive provide a car that doesn’t have excessive understeer or torque steering, as is common with front-wheel drive cars, nor excessive oversteer, which was the reason Ralph Nader claimed the Chevrolet Corvair was “Unsafe at Any Speed.” The Tesla Model 3 has a 48/52 weight distribution in addition to a very low center of gravity thanks to its heavy battery pack, which is mounted beneath the floor. BMW has long touted its 50/50 weight distribution (in addition to the tuning of its suspension) as a key reason its cars are the “Ultimate Driving Machine.” This is a branding of neutral handling and is an important reason that BMW cars are fun to drive. Back in 2016 and 2017 when Tesla was tuning the suspension, it was reported that Tesla benchmarked the car against the BMW 3 Series and tuned the suspension so the car handles similar to the BMW.
- Latest technology has always been a selling feature for premium cars. When new features such as rear-wheel steering or airbags first appear on the market, they tend to show up on the more expensive cars in an automakers lineup. BMW calls its infotainment software iDrive, and although buyers like that it is far more advanced than what you will find on a low-end Nissan or Kia, it has also received some negative reviews. Tesla is widely known for having the most advanced software in the business, with unmatched driver assistance (FSD Beta) and entertainment features. On the other hand, fans of Apple CarPlay and Android Auto complain that Tesla supports neither.
- Luxury materials and fancy designs: Tesla does include “vegan leather” and Alcantara (although, it did take this away from the headliner to a bit of controversy a few years ago). Fans of minimalism love Tesla vehicles’ clean and simple design, but some fans of traditional luxury cars feel Tesla’s design and materials look and feel cheap. They are both correct, and some people will like it and some people won’t. Maybe someday Tesla will offer more options, but today, if you want fancy interiors, you will have to look to the aftermarket and companies like Tsportline.
- Advanced safety features: Luxury cars have always been the first cars to get the most advanced safety features, when there are new and too expensive to include in every car. Much has been written on Tesla’s superior safety, but I still think this article I wrote 4 and half years ago does a great job of explaining why many people insist their family ride or drive Tesla vehicles whenever possible.
- Distinctive look and ability to turn heads: People have long purchased luxury cars to help them get noticed by their peers or members of the opposite sex. This requires a combination of a good looking car and a reputation of the car costing more than the average Joe can afford. Tesla has done a great job with this until recently. Tesla cars are becoming too common to have a distinctive look and are too affordable to give your friends the impression you have “made it.”
Affordability
- The first thing people notice on a car is the purchase price. The average transaction price in the US is over $48,000, and the net purchase price of a Tesla starts at a little more than half of that, even while Tesla vehicles can now be had for down under $30,000 nationally (after tax credits, inventory discounts, and referral discounts). This suggests Tesla vehicles aren’t just as affordable as gas cars, they are more affordable.
- You can’t discuss savings on electric cars without mentioning how many owners save 80% or more on fuel. This article I wrote on electric fuel savings 5 years ago was my 3rd article ever, but it is still my favorite at explaining WHY electric cars cost so much less to run. Texas drivers that drive a lot of miles can save even more with Tesla’s new offering of unlimited overnight charging for $25 a month.
- A big cost of cars, especially luxury cars is depreciation. Luckily for Tesla, its cars have a history of holding their value better than most cars. I explain the situation in this deep dive into depreciation, but the TL;DR is the cars’ styling has changed slowly, so older Tesla don’t look dated, the older cars don’t wear out, and over-the-air software updates allow the older cars to have most of the features of the newest Tesla vehicles. All those reasons mean that a 5-year-old Tesla might be perceived as 80% as good as a new Tesla, whereas a 5-year-old BMW or Toyota might only be 60% as good as a new BMW or Toyota.
- I have been a pioneer on attempting to get people to look at the total cost of ownership and not just purchase price. I have written about the affordability of Tesla cars starting with this groundbreaking article nearly 5 years ago and including my most recent update on the subject comparing the costs of a Model 3 to the cheapest car sold in the US.
Conclusion
I could have listed many more reasons, like low maintenance and repair costs, but I decided to stop at 10 for this article. I encourage Tesla to copy as much of this article as it wishes for its upcoming advertising campaigns. Tesla cars offer great value for the money, yet most people have no idea that is the case.
If you want to take advantage of my Tesla referral link to get $500 off a new Model 3 or Y (or $1,000 off a Model S or X) plus 3 months free trial of Full Self Driving, here’s the code: https://ts.la/paul92237 — but if another owner helped you, please use their link instead of mine, since I have more referral credits than I know what to do with. If you want to learn more about Tesla’s referral program, here is the link with the latest details.
Disclosure: I am a shareholder in Tesla [TSLA], BYD [BYDDY], Nio [NIO], XPeng [XPEV], Hertz [HTZ], and several ARK ETFs. But I offer no investment advice of any sort here.
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