Tesla creeps up luxury market chart

The world witnessed how quickly Tesla took market leadership on electric vehicle sales.

But now, steadily, its success in selling high-end EVs also is moving it into the top tier of U.S. luxury brands, regardless of powertrain.

Based on market data released last week by Experian, Tesla has passed Mercedes-Benz for the No. 3 spot in U.S. luxury-vehicle registrations this year through September.

Luxury leader BMW and Lexus remain firmly in the market's No. 1 and No. 2 positions, respectively. But Tesla has been narrowing the gap with those leaders, too.

The EV pioneer appears to have enough momentum to catch up with Lexus and possibly BMW before the year is over.

Tesla vehicle registrations totaled 230,855 through the first three quarters of the year, passing Mercedes with 213,708, Experian data showed. Lexus was in second place with 245,864 and BMW was leading the market with 259,237 in the nine-month period.

But Tesla surged in September. While new BMW registrations rose 22,990 for the month, and Lexus added 22,908, Tesla registrations increased by 36,690 vehicles, according to Experian.

Tesla was more than 40,000 vehicles behind the luxury market leader in June. It's now just 28,382 behind.

The question on the minds of many right now: Is Tesla simply an unstoppable juggernaut? Or is all this merely a reflection of the temporary global chaos of not enough microchips to go around?

"It might be a bit early to say Tesla is surpassing Mercedes in sales permanently, but the fact that it's managed to do so with a much more limited product line is impressive," said Jessica Caldwell, executive director of insights at Edmunds.

"Given where we are with the chip shortage, it's probably premature to make any sweeping long-term declarations as automakers are grappling with varying degrees of difficulty, but it does show the strength of Tesla," Caldwell said.

Tesla doesn't release U.S. sales figures. As a result, registration counts provide the most-comprehensive view of the market battleground. Registration data generaly align with sales totals.

Tesla has been able to weather the semiconductor shortage better than some rivals, partially by using software for functions previously controlled by chips.

But Jeff Aiosa, owner of Mercedes-Benz of New London in Connecticut, concedes that Tesla's market success is "astonishing," given it is an EV-only brand with a limited product range.

"It suggests the transition to electric vehicles is happening a lot faster than we anticipated," Aiosa said.

The Mercedes dealer is hopeful that his brand's EV lineup will help it take the competition to Tesla as those new products arrive in the coming years.

Aiosa also sees a key differentiator between the two brands.

"Mercedes-Benz represents luxury and technology," Aiosa said. "Tesla is a great technology company, but they are not on par with the luxury that Mercedes-Benz brings to the equation."

Tesla's portfolio is expanding. In addition to its current lineup of two sedans and two crossovers, Tesla plans to launch the Cybertruck pickup next year from a new plant in Texas, and it has a massive bank of preorders. Musk has said supply is the problem, not demand.

Tesla has also been steadily raising prices, often sharply and abruptly. Rivals, too, have been charging more for their vehicles at the dealer level, with much higher transaction prices than last year because of supply constraints.

Mercedes-Benz dealer Patrick Womack is not convinced of Tesla's trajectory. Womack said the recent registration data simply reflects the severity of the inventory shortages facing the German brands.

"There are no cars to sell in a Mercedes dealership right now," said Womack, dealer principal of Mercedes-Benz of Billings in Montana. "Last month was the bottom of the barrel. "

Womack, who previously was general manager of Laurel BMW of Westmont, said the suburban Chicago store began October with 22 cars on the ground.

"I used to have 300," Womack said.

The dealer, however, expects BMW and Mercedes registrations to make a "strong rebound" by the end of the year.

"The inventories in the fourth quarter are going to start to increase," Womack said.