Turns out, you don’t have to be rich to own a Tesla

Not just a toy for the rich
Not just a toy for the rich
Image: AP/Mel Evans
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Conventional wisdom holds that Tesla owners are luxury car buyers who have switched from Mercedes or BMWs. But new research shows a large proportion of people who had never spent more than $60,000 for a car before are willing to shell out a premium for a $100,000 Tesla from Elon Musk’s electric car company.

“On average, owners assign a 60% premium to Tesla,” writes Jeffries analyst Dan Dolev, in a research note.

Jeffries surveyed 145 Tesla owners about what car they drove before buying a Tesla and what brand they would have bought if they had not purchased the Tesla.

Tesla substitutes ranged from a $22,000 Toyota Camry to a BMW 3-Series, with more than 64% of people saying they would have bought a car under $90,000.

That means that either rich people who didn’t see a reason to spend that much money on a car are suddenly inspired by a Tesla, or that less wealthy people are willing to save more, make more tradeoffs, or borrow, in order to afford the hefty Tesla premium.

Either way, the research bodes well for a long-awaited cheaper version of the car. Its $35,000 Model 3, which is expected to be released in 2017, could bring even more Tesla owners.