Who Needs German Engineering? Tesla Outsells Mercedes-Benz For The First Time—And Has a Plan to Pass BMW Too

October 12, 2018, 11:34 AM UTC

When it comes to sales, Tesla (TSLA) beat out Mercedes Benz for the first time in the U.S. last quarter. Atherton Research says Elon Musk’s car company sold 69,925 of its Model 3, S and X cars, while Mercedes Benz sold 66,542 vehicles (excluding commercial vans) in the U.S.

Tesla is on the right path to overtake BMW (BMWYY) in the final quarter of this year as well, analyst Jean Baptiste Su wrote. BMW sold 71,679 vehicles in the past quarter from June to September.

And now Tesla is rallying customers with a tax break: The carmaker said orders for cars placed by Oct. 15 will be eligible for a full federal tax credit of $7,500 and that those cars would be delivered by the end of the year.

Since Tesla has until the end of the year to hand out full tax credits, a further rush of orders could drag down the company’s already strained production and delivery chain. Many customers have been waiting for their Model 3 sedans since early 2016. Vehicles have piled up in lots around California awaiting transport, and Musk said last month that Tesla had moved from “production hell to delivery logistics hell.”

That means many customers may still have to wait three months or more for their shiny new car. In the third quarter, Tesla says it delivered 83,500 vehicles, 80% more than the company delivered in all of 2017. Musk said earlier this month Tesla was near profitability.

Tesla’s acceleration isn’t surprising, Akshay Anand, an executive analyst for Kelley Blue Book, told USA Today: “Tesla has done a wonderful job building its brand and creating buzz, so much so that it almost seems to transcend automotive at times and enter the ‘lifestyle’ brand fray along with the Googles and Apples of the world.”

Fred Lambert at Electrek points out Tesla is outselling Mercedes-Benz with only three options in the premium segment. “Imagine what will happen when Tesla will launch the base $35,000 version of the Model 3 later this year and then expand Model 3 deliveries to international markets.”