Q1 2021 Kelley Blue Book Brand Watch Report: Tesla, Volvo Gain While BMW, Mercedes-Benz Slip

Tesla made a stunning comeback by nearly every measure in the Kelley Blue Book Brand Watch™ report for luxury vehicles for the first quarter of 2021.

The Kelley Blue Book Brand Watch report is a consumer perception survey that also weaves in consumer shopping behavior to determine how a brand or model stacks up with its segment competitors on a dozen factors key to a consumer’s buying decision. Kelley Blue Book produces a separate Brand Watch report for non-luxury and luxury brands each quarter.

Shopping consideration for Tesla-brand vehicles had the biggest increase of any luxury brand. Of all luxury-vehicle shoppers, 15% considered a Tesla, making it the fourth most-shopped luxury brand though off its all-time high of 16%.

Shopping for the Tesla Model 3 rose a whopping 59%, shopping for the Model Y rose 45%, and freshened Model S consideration rose 11%. The Model 3 returned to its once long-held spot of most-shopped luxury vehicle. Before the fourth quarter of 2020, the Model 3 was the most-shopped luxury vehicle for six consecutive quarters. In the latest quarter, the Model Y ranked No. 3 and the Model S was No. 5.

Quarterly Consideration Growth

Shopping for Tesla models turned into sales. Cox Automotive estimates Tesla’s U.S. sales in the first quarter at 69,300 vehicles, up 23%, outperforming the luxury market, which was up a healthy 17%.

Tesla’s Brand Watch performance in the first quarter was a reversal from that of the fourth quarter of 2020 when shopping consideration for Tesla fell a hefty four percentage points from the third quarter to only 12%. The decline then was caused by Tesla Model 3 shopping plummeting by 40%, more than any luxury model in the quarter. All of Tesla’s models slipped significantly in the fourth quarter 2020 rankings.

In terms of factors most important to luxury vehicle shoppers, Tesla also rebounded. Tesla took first-place positions in four of the 12 most important factors to shoppers – Driving Performance, Interior Layout, Technology and Fuel Efficiency.

Tesla likely was helped in the Interior Layout category by a freshening of the interior of the Model S, the first freshening since 2012. The improvements in battery range and 0-to-60 mph performance helped secure Tesla’s win in Driving Performance and Technology. Tesla has long held the No. 1 spot for Fuel Efficiency. In addition, Tesla held onto the No. 2 spot for Prestige/Sophistication, surpassed by Porsche.

Still, Tesla did not return to its pinnacle, when it took top honors in eight of the 12 factors in the third quarter of 2018, due to increased competition.

BMW Clings to No. 1; 3 Series Falls

BMW maintained its No. 1 position for the 11^th consecutive quarter as the most-shopped luxury brand in the quarter. Nevertheless, shopping consideration for BMW vehicles slipped. In the quarter, 20% of all luxury shoppers considered a BMW, down from 22% in the previous quarter. The decline may be attributed to a slowdown in lease deals, or consumers thinking the inventory drain caused by the chip shortage limited their choices.

Quarterly Brand Consideration

Whatever the reason, declining in shopping consideration for the BMW X5, X3 and 3 Series pushed the total down. The newly launched M4 had higher consideration but not enough to offset the declines in the higher volume models.

For the first time in eight years, only one BMW made the Top 10 list of most-shopped luxury vehicles, that being the X5, and its shopping consideration slipped 9%. The brand typically has two or three models in the Top 10. The 3 Series disappeared from the Top 10 list of most-shopped luxury vehicles altogether.

Still, the decline in shopping consideration did not hurt sales. BMW outpaced the luxury segment with a 20% rise in first-quarter sales, led by the X3. However, Lexus outsold BMW in the quarter, with a 32% sales increase to 74,253 vehicles sold.

In Kelley Blue Book Brand Watch, Lexus took back the No. 2 spot for shopping from Audi in the quarter. Audi’s shopping consideration dropped a percentage point, while Lexus held steady even though the RX fell behind the Tesla Model 3 in overall shopping consideration. RX shopping fell 18% but was still the most-shopped SUV. Lexus and particularly the RX have had the lowest inventories due to the computer chip shortage. The RX did hold on to its spot as the most-shopped luxury SUV, however. Indeed, the RX, along with the NX, accounted for a third of Lexus’ sales in the quarter.

Shopping consideration for Mercedes-Benz dropped two percentage points to 15% of all luxury vehicle shoppers. Nevertheless, Mercedes captured the luxury vehicle sales crown for the quarter with sales of 78,256, up 16% from a year earlier, led by the GLE SUV and its smaller sibling, the GLC.

Acura shopping consideration slipped a percentage point on 21% lower shopping for the MDX, even though it underwent a redesign that launched in February. The RDX had a 23% rise, supported by low-interest financing and lease deals.

Volvo had the biggest increase in shopping consideration, up from 7% to 10%. Other brands that gained shopping consideration were Lincoln, Buick and Land Rover. Those that slipped a bit were Audi, Cadillac, Porsche and Jaguar. The remaining brands held steady.

Car Versus SUV Gap Narrows

The gap between shopping for luxury SUVs and shopping for luxury cars narrowed some in the quarter. 

Consumers still favor SUVs over cars. In the quarter, 66% of all luxury shoppers considered an SUV. That was up from 64% a year ago but down from the record 69% in the 2020 fourth quarter. The Top Five most-shopped luxury SUVs were: Lexus RX, No. 1 for the fifth consecutive quarter; Tesla Model Y, climbing eight spots in the rankings; Audi Q5, which was freshened and moved up from No. 3; Buick Enclave; and Acura RDX.

Quarterly Segment Consideration

Shopping consideration for cars edged up from the fourth quarter to 54% matching year-ago levels, buoyed by increased shopping for the Tesla Model 3 and Model S, in the No. 1 and No. 2 spots of most-shopped cars. The Cadillac CT6 saw shopping consideration soar by 85% and moving into the third most-shopped car as Cadillac discontinues it. The BMW 5 Series and BMW 3 Series rounded out the five most-shopped luxury cars.

Top 10 Considered Models

Luxury cars may have had an advantage in the first quarter with inventory. The chip shortage has hurt luxury SUVs more than cars, some of which have had an abundance of stock.

In terms of electrified vehicles, the only luxury vehicles on the Top 10 most-shopped electrified vehicles, including hybrids, plug-in hybrids and EVs, were Tesla models. They were: Model 3, at No. 2; Model Y at No. 5; and Model S at No. 6.

Quarterly Top Considered Electrified Models

Factors Important to Luxury Shoppers

The rankings of the top four of 12 factors most important to luxury vehicle shoppers have held steady for the past five years. Durability/Reliability, by far, is most important followed by Safety and Driving Comfort, which swapped spots in the first quarter from 2020’s fourth quarter.

Factors Driving Luxury Consideration

In the last five years, Porsche and Tesla have taken turns leading Driving Performance. Tesla took it this quarter. Porsche has been the reigning leader in Prestige/Sophistication for three consecutive quarters. However, Jaguar overtook Porsche for Exterior Styling. The British brand introduced its new I-Pace Black with striking design elements.