Business Intelligence (BI)

Tesla's Dominance in Electric Vehicle Market Is Eroding

12 July 2024

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Zaker Adham

Summary

Tesla, once the undisputed leader in the US electric vehicle (EV) market, is witnessing a significant decline in its market share.

According to the New York Times, Tesla's hold on the market fell below 50% in the second quarter of this year, dropping to 49.7% from 59.3% in the same period last year. This shift occurs even as overall EV sales reach new heights.

Despite this decline, the demand for electric vehicles continues to grow, with a year-over-year sales increase of 11.3%, as reported by vehicle marketing firm Cox Automotive. Tesla's slipping dominance suggests the company is facing mounting pressure from competitors and the consequences of the polarizing actions of its CEO, Elon Musk.

A report by the Alliance for Automotive Innovation highlights that American consumers now have 113 battery electric vehicles, plug-in hybrids, and fuel cell cars to choose from. Tesla faces stiff competition from four different electric pickups rivaling its Cybertruck.

Moreover, the decreasing prices of electric vehicles are making them accessible to a broader audience, a challenge for Tesla, which has traditionally targeted a luxury market. The company has also grappled with extended repair times, causing customer dissatisfaction.

Domestic competition is intensifying as well. For instance, Chevrolet plans to launch an Equinox SUV priced at $35,000 before a $7,500 federal tax credit, providing a more affordable option for consumers compared to Tesla's offerings.

Tesla's recent performance has been mixed. After reporting its first quarter-over-quarter sales decline earlier this year, the company's stock saw a boost following the approval of Elon Musk's significant pay package and stronger-than-expected Q2 deliveries. Despite these gains, 2024 remains a challenging year for Tesla.