The Tesla Model S is not just the first all-electric vehicle to top 200 miles in range, it’s also a popular toy among America’s West Coast elite.
An analysis of new U.S. car registrations from auto data provider Polk by the automotive pricing and information provider Edmunds.com reveals that the Model S is currently the best-selling car in eight of the 25 wealthiest American ZIP codes. Leading the pack is Atherton, Calif., which sits adjacent to the Palo Alto headquarters of Tesla Motors Inc. (NASDAQ:TSLA) and has a median home price topping $6.6 million.
According to the data, 15.4 percent of all new car registrations in Atherton in the first eight months of the year were Teslas, while in nearby Los Altos and Portola Valley they accounted for more than 10 percent.
The details shows that high-income Californians are digging the new wheels. For the rest of the country? So far, not so much.
“It’s a classic pattern for any retail product, including cars: the wealthy and influential buyers set a trend, and the mainstream aspires to follow,” says Jessica Caldwell, Edmunds.com senior analyst. “As Tesla increases the number of models and improves its price points, it could find itself in demand by more than just those in these wealthy enclaves. After all, luxury car companies typically find the most volume in their entry-level vehicles.”
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Tesla has a long way to go for that, even in the low-volume, high-margin luxury car segment. Outside of California, only in Water Mill, N.Y., has the Model S gained market share above 1 percent. The pattern seems to be playing out globally, too, where Norway, a country with a small, affluent population, is where the Model S was the No. 1 selling model in September.
Electric cars have never really taken off, historically speaking, and the No. 1 selling EV in history is Nissan’s Leaf, which has found a small niche among customers willing to trade the Leaf’s meager 80 miles of range for zero-emission, lower cost driving. Tesla says it will release a sub-$40,000 EV, possibly called the Model E (the working title is “Gen 3”), in four years.
To do that might require the company to sacrifice range, unless it can figure out how to cram more juice into a smaller battery pack that it would probably use for a compact. Until then, it will have to rely on wealthy, environmentally conscious futurists to generate growth.