Tesla’s waning dominance in the US electric vehicle market

Tesla’s waning dominance in the US electric vehicle market
Linked media – Associated media

In the second quarter of the year, Tesla’s share of the U.S. electric vehicle market dropped below 50% for the first time, according to recent estimates from research firm Cox Automotive. Tesla’s share fell to 49.7% from 59.3% in the same period last year. This decline is notable as sales of battery-powered vehicles hit record highs during the same timeframe.

From April to June, Tesla faced increasing competition from General Motors, Ford, Hyundai, and Kia. Cox Automotive’s estimates, which are based on filings, company reports, and other data, highlight this shift. The last quarter marks a significant milestone as it is the first time Tesla’s market share dipped below the 50% mark in a single quarter.

Despite Tesla’s market share decline, overall U.S. electric vehicle sales increased by 11.3% compared to the previous year. More than 330,000 electric cars and light trucks were sold or leased, representing 8% of all new vehicle sales, up from 7.2% the previous year. This indicates robust consumer interest in electric vehicles, even though the market is not growing at last year’s rate of over 40%.

A few years ago, Tesla had few rivals. Its vehicles’ range and acceleration capabilities were unmatched. However, established automakers have now introduced electric models that can travel 300 miles or more, matching or surpassing Tesla’s offerings. There are now over 100 electric models available in the United States, according to a report by the Alliance for Automotive Innovation. The increased supply and variety have driven prices down, making electric vehicles more accessible.

Stephanie Valdez Streaty, director of industry insights at Cox, noted the impact of intense competition, stating that it is driving price pressure, which in turn is aiding the gradual increase in electric vehicle adoption.

Consumers are increasingly turning to electric cars from traditional automakers like BMW and Ford, which have extensive dealer networks for maintenance and repairs. Tesla’s online sales model, coupled with a limited service center network, has posed challenges for some customers seeking vehicle servicing.

Additionally, Tesla’s sales have been impacted by its aging model lineup. The Model Y, Tesla’s best-selling vehicle, was introduced in 2020, making it relatively old by industry standards. In contrast, Hyundai and Kia offer newer, more competitively priced electric models.

General Motors has recently accelerated its rollout of vehicles designed specifically to be electric, rather than converting gasoline-powered models. GM is also using U.S.-made batteries through a joint venture with LG Energy Solutions. The electric Chevrolet Equinox, expected to sell for around $35,000 before a $7,500 federal tax credit, is set to launch soon.

Tesla’s global sales dropped by 4.8% in the second quarter, totaling about 444,000 vehicles. While Tesla does not provide country-specific sales figures, Cox Automotive estimates that U.S. sales fell by 6.3% to 175,000 cars in the same period.

Elon Musk’s public political stances, particularly his alignment with right-wing politics on his social media platform X, may have influenced Tesla’s sales. Electric vehicle buyers tend to lean liberal, and sales are highest in states that typically vote Democrat.

While the growth rate for electric vehicle sales has not met some automakers’ expectations, the market is still expanding faster than that for gasoline-powered vehicles. Hybrid vehicles, which do not rely on the developing public charging network, have also seen faster growth recently.

Not all automakers have seen sales gains. In the second quarter, brands like Mercedes-Benz, Polestar, Porsche, and Volvo experienced declines in electric vehicle sales compared to the previous year, according to Cox. The company plans to release detailed sales and market share data soon.

Linked media – Associated media

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