Ever since Tesla Inc. (NASDAQ: TSLA) released the Roadster back in 2008, the electric vehicle (“EV”) startup has been at the top of the electric vehicle sector. Following the Roadster up with the ultra-successful Model 3 and the Model Y, Tesla quickly became the most valuable car company in the world, beating out industry giants such as Toyota. However, the EV maker has been seeing plenty of competition from several EV startups recently, as well as established automakers for the past few years, making its tenure at the top precarious.
This year, Tesla’s sales in the United states, its largest market, have been held back by a new entrant into the electric vehicle scene. Automaker Ford recently released its first offering, the Mustang Mach-E, an electric SUV that has proved to be a thorn in Tesla’s side. Although the model is still quite new, American drivers have been purchasing it in droves, eating into Tesla’s potential sales. Although Ford sold only 3,739 Mustang Mach-Es in February, Tesla saw its market share drop to 69% within the same period, compared to 81% last year.
California has been a key market, with one-fifth of the Mustang Mach-Es sold in February going to California drivers. Last year, nearly half of Tesla’s Model 3 vehicles were sold in California.
Ford’s new electric SUV has been met with acclaim, receiving the Vehicle of the Year Award in January at the North American Car, Truck, and Utility Vehicle of the Year as well as positive reviews from a variety of early testers, including Wall Street analysts. The award signaled that the Mustang Mach-E would give Tesla a run for its money, and according to JP Morgan, Ford could indeed pose a great challenge to the pioneering EV maker thanks to its brand recognition and history.
Noting that they didn’t rank any EV model as superior to another, the analysts said customers may be more attracted to the Mach-E due to its styling coupled with the fact that it comes with a $7,500 federal tax credit. Even Tesla’s CEO Elon Musk seems to recognize the threat Ford poses, saying on Twitter that Tesla and Ford are the only carmakers in America that, out of thousands of car startups, haven’t gone belly up.
However, despite the fact that Tesla lost some of its market share to Ford, analysis by Morgan Stanley found that more Americans are buying Teslas, especially as drivers look to switch to zero-emission vehicles. The United States saw a 34% increase in electric vehicle sales in February while traditional gas-powered vehicles experienced a 5.4% reduction in sales.
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