Analyst: Tesla owners are willing to pay way more for the Model S than a traditional car

Tesla Model STesla MotorsTesla Model S

Jefferies auto analyst Dan Dolev released a Tesla research note on Thursday. In it, he and his team report on a survey Jefferies conducted of 145 U.S. Tesla owners.

The big takeaway is that Tesla owners aren’t necessarily all wealthy early adopters of high tech toys.

About 70% of them moved to Tesla from cars that cost less than $US60,000, Jefferies noted.

These owners were happy to pay more.

“On average, owners were willing to pay 60% more for a Tesla,” Dolev wrote.

The Jefferies survey also showed that 65% of the top 20 gasoline-powered alternatives the owners considered before buying their Tesla cost less than $US60,000.

Dolev initiated coverage of Tesla in May, with a “buy” rating price target of $US350. He’s since raised that to $US360.

What we can glean from this is that Tesla is indeed special — so special that buyers are willing to pay substantially more for the privilege of Tesla ownership than to park a traditional car in the driveway.

The Model S is so appealing that it gets people to buy a car way out of their price range, or convinces people who wouldn’t otherwise spend a lot of money on a car — to spend a lot of money on a car.

To its credit, Tesla has worked to expand ownership opportunities for prospective Tesla buyers. Earlier this year, the company introduced the $US58,000 entry level Model S P70D. In addition, the company has offered leasing options to buyers for several years and recently set up a certified preowned program.

On Tuesday, Tesla shares closed at $US269, up slightly.

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