The Tesla Model 3's arrival in Europe last year helped boost sales in the midsize premium segment by more than a fifth as the full-electric car shook up a segment dominated by BMW, Mercedes-Benz and Audi.
"The Model 3 was the main reason for the growth of the segment," said Felipe Munoz, global analyst with market researcher JATO Dynamics. Munoz pointed out that the segment's rise closely mirrored the 2019 sales total for the Model 3, which currently has no direct rivals. "It proves that a new technology with a reasonable price can bring back the attention of customers who shifted to SUVs," he said.
The Model 3 finished in fourth place for the year with a volume of 94,482, according to JATO data. Making this result even more impressive was that the Model 3 is only offered as a sedan in a segment where the three cars ahead of it in the ranking all also offer wagon variants because of strong demand for the body type from midsize premium buyers.
LMC Automotive senior analyst Sammy Chan cautioned that Model 3 sales are likely to be hit by the arrival of Tesla's Model Y midsize SUV, due in 2021.
The hit could be offset if midsize premium sedans and wagons get a boost because of regulatory reasons. "There is a chance that automakers would push more conventional models such as sedans over SUVs should they really struggle to meet the tighter emission standards over the next couple of years," Chan said.
Another factor affecting the segment is the coronavirus pandemic. Following the Tesla-fueled 21 percent jump to 542,000 in 2019, the segment is at risk of declining by 14 percent to 467,000 this year, LMC forecasts. The firm expects the segment to rebound to 536,000 in 2021 and reach 555,000 units in 2022.