by Chris Adede . Dec 06, 2022
Tesla is the market leader in electric vehicles, but recent reports show the company's hold on the market is slipping.
S&P Global Mobility released its report on EV sales in the US recently, which showed that Tesla holds a 65% market share of the EV market. This is a downgrade from 79% two years ago. The report also shows that Tesla's share has been slipping since 2020, when it was 79%.
The report says that much of this decline is due to EVs available in a more accessible MSRP range of less than $50,000. In other words, more affordable options are becoming available, and they're making their way onto people's driveways across America.
While Tesla’s market share in the EV market is not as high as some might think, it has dominated the competition so far.
In fact, out of the roughly 525,000 electric vehicles registered from January to September 2022, 340,000 were Teslas—that’s 56% of all EVs registered during this period. 46 other EVs share the remaining market percentage.
Tesla topped the charts by September this year with four of the top five EV models. The Tesla Model 3 and Model Y together accounted for over half of all EVs sold during this period. The other models are Chevrolet, Nissan Leaf, Hyundai Ioniq5, Kia EV6, and Volkswagen ID.4.
Tesla's position in the EV market is changing due to other affordable options. A report by S&P Global Mobility notes that Tesla's position as the dominant electric vehicle market will not be guaranteed in the future.
The report points out that other affordable options offer better, equal technology and production build, which means that Tesla’s ability to retain a dominant market share will not be guaranteed.
The group of the other 48 competing models to the Model 3 and Model Y seems to only grow. The report says that many of these competitors are already well-known brands with established distribution networks and dealer networks.
These companies are well-positioned to capture market share from Tesla because they have a brand recognition advantage over Tesla, which lacks a well-established brand name outside its loyal following.
With these new entrants looking to make their mark on the EV market, it will become increasingly challenging for Tesla to sustain its dominance over time.
In recent years, Tesla has been the only automaker that is a pure-EV company. They have gained an advantage over other automakers as they are not competing with themselves. The recent report estimates this could be their advantage as less of the EV owners have turned back to ICE powertrains.”
With the rise in competition, Tesla’s brand loyalty could be tested as more EVs enter the market. The Model Y currently has 60.5% brand loyalty, and nearly 74 per cent of buyers were first-time Tesla owners. These figures both lead the industry.
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