During the earnings meeting, someone asked what the most traded in vehicles for the Model 3 was. Tesla listed BMW 3 series, the Toyota Prius, Honda Accord, Honda Civic and the Nissan Leaf. Of the five that they provided, the Honda Civic caught my attention. The Model 3 is a direct competitor for the BMW 3 series, and neither the Leaf nor Prius make up a significant share of the market.
The two that makes up the most significant share of cars are the Accord & Civic. The Accords can range anywhere from $24k to $36k based on the options. When Tesla said they were coming out with a $35k car, I honestly thought they would be targeting Accord owners. The price difference is relatively small when making the jump.
However, a Civic had me thinking. I thought I was in the minority on this. If I had to guess, I think there were a lot of people who were like me that purchased the Civic not because it was cheap, but because it was fuel efficient. Boasting up to 40 MPG, it was a cheap daily driver that looked good! As we know, Tesla hadn’t released the short range battery, so the Model 3, starting at $49k, is a big jump for Civic owners which could range from $19.5k to $28k.
So why the jump? I guess that if these owners are using them as their daily driver, they are offsetting the cost of gas to justify the additional cost of the Model 3. Say a person drives 25 miles a day to work, and the price of gas is $3.20 per gallon. At 40 MPG, it would cost $4 round trip. Say they go to work five days a week for 52 weeks; you are looking at a fuel cost of over $1000 per year! Seeing that Civics are a car that lasts, it’s entirely possible to have it for 10+ years. You are looking at $10k or more during the lifetime of the vehicle at a minimum. Add the maintenance cost of the car; you’ll quickly go past the cost difference of just getting a Model 3! Tesla’s are inherently low maintenance vehicles, which makes this a value buy!
However, if that were the case, how come we don’t see a Corolla or Camry on this list? They have after all sold roughly the same amount, if not more, of vehicles throughout the past decade. I would guess that if we look past the top 5, we might see Camrys and Corollas in the there, at least in the top 10.
Another thing that makes a move away Toyotas and Hondas interesting is they have a powerful brand following. People who buy these vehicles tend to buy the same manufacturer. Moreover, if they do go the luxury route, I would think they would choose their luxury counterpart, Lexus & Acura. I’m also curious where Suburus land on the list. What’re your thoughts? Let me know in the comments!