Tesla has become the first American brand in 25 years to reach the top of the U.S. luxury market, beating out 2021’s winner BMW.
In total, the EV maker sold 491,000 vehicles in 2022, 158,612 more than its luxury market competitor BMW, who finished the year with 332,388 U.S. sales. In 2021, the German brand sold slightly more vehicles than it would a year later, hitting 336,644 units, modestly beating Tesla’s estimated 313,644 sales. Mercedes-Benz and Lexus arrived in third and fourth place respectively. The only other American company to reach a top ten ranking was Cadillac, with sold 133,726 and finished in sixth place.
Tesla’s success in the U.S. luxury market contrasts the number of challenges the brand faces. Despite selling a record number of vehicles in 2022, the company still fell short of its delivery target, even after hosting surprise holiday discounts in December. The brand’s CEO, Elon Musk, was heavily criticized for his purchase of Twitter, which some investors believe came at the cost of the publicly traded car company. Although it still overwhelmingly dominates the EV space in the U.S., its market share is steadily decreasing as legacy automakers, such as Ford and General Motors, pushed out new electric lineups. By December, the company’s share price had also declined by an unenviable 70%, hitting a two year low in January, although shares have since started to rebound.
Setting aside its challenges, the strength of the brand’s luxury market performance highlights the growing relevance of EVs, along with the technology’s biggest obstacle. Although interest in electrification seems more widespread than ever, high prices promise to exclude customers outside of high income brackets. Encouraging adoption will require better affordability, which the industry seems to have realized. Whether Tesla will stick to its demographics in the face of more competition remains to be seen.
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