Tesla Soars to an Early Lead in US Luxury Market, Thanks to Price Cuts and Federal Tax Credit

Experian data reveals Tesla’s new registrations in January outnumbered Mercedes-Benz and Lexus combined

According to a report from Automotive News, data from Experian reveals that Tesla Inc. has taken an early lead in the US luxury vehicle market in January, with 49,917 new registrations. BMW secured the No. 2 spot with 31,070 registrations, while Mercedes-Benz and Lexus held the third and fourth positions with 23,345 and 23,082 registrations, respectively.

The Texas-based EV manufacturer experienced a surge in registrations, attributed to recent price cuts and the reinstatement of the $7,500 federal tax credit. Tesla’s growth in the US continues to accelerate with its four-vehicle lineup, while its competitors remain mostly stagnant.

Experian’s data provides valuable insights into Tesla’s performance, as the automaker does not disclose global sales by country or region. The data offers a market comparison but does not precisely align with official sales figures.

Compared to January 2022, Tesla’s new-vehicle registrations increased by 34%, BMW’s by 2.5%, Mercedes’ by 7.3%, and Lexus’ decreased by 6.6%. Tesla’s best-selling Model Y crossover received a $13,000 price cut in mid-January, which contributed to the surge in demand and the absorption of production from Tesla’s new plant in Austin, Texas.

The federal EV tax credit further boosted Tesla’s registrations. Previously, Tesla was ineligible for the tax break as it had reached the cap of 200,000 credits under the old rules. However, the new law does not have any such limits.

Experian data showed that Model Y registrations in January surged by 56% to 28,833 vehicles, while Model 3 sedan registrations, which received a smaller price cut, increased by 29% to 17,526.

Tesla dominated the overall EV market, holding 57% of the market share in January, compared to BMW’s 2.9% and Mercedes’ 2.4%. Lexus has yet to introduce an EV to the market.

Among all luxury brands, regardless of fuel type, Audi ranked No. 5 with 19,113 registrations, a 38% increase compared to January 2022. Cadillac secured sixth place with 13,220 registrations, a 36% increase.

Although considered a luxury brand due to its price points and tech features, Tesla CEO Elon Musk announced in March that the company is working on a new platform for more affordable vehicles.