Tesla has been the electric vehicle industry’s top-performing company for most of the sector’s existence, pioneering the modern electric vehicle and selling more EVs than other automakers. However, after basically running the EV industry for more than a decade, Tesla has been forced to contend with significantly increased competition in major markets such as the United States and China.
Data shows that the company’s electric vehicle market share in the U.S. during Q3 2023 dropped below 50% compared to almost 65% over the same period in 2022. Even though Tesla saw its EV sales soar by close to 20% in the third quarter of the year amid price cuts, this wasn’t enough for Tesla to protect its market share from competing companies.
Both electric vehicle startups and established automakers are working hard to catch up to Tesla, and the Elon Musk-led company is feeling the heat. Tesla’s head start in the nascent EV industry, especially its grasp of next-generation vehicle software, allowed the company to pull far ahead of other carmakers in only a decade.
However, with automakers such as Ford, General Motors, Stellantis and others investing hundreds of millions to billions of dollars into EV development, Tesla’s days at the top may be drawing to a close. A third-quarter Electric Vehicle Sales Report from Cox Automotive revealed that Tesla’s market share fell 50% — its lowest ever on record since it built up an EV monopoly.
This is despite the fact that Tesla cut prices for popular models, including the Model X and S, to make them more affordable and increase sales. More specifically, the company discounted the Model S by 14% in China and the Model X by 21% in China and saw a 19% rise in sales due to the price cuts in Q3 2023 compared to 2022. However, it seems the Tesla brand isn’t as enticing as it used to be, and consumers are increasingly opting for alternative EV brands, even as Tesla’s become more affordable.
In addition, the company is losing its overall market share despite lower prices and higher sales as other automakers such as Mercedes, Hyundai and BMW have released their own electrified offerings. EV startup Rivian’s market share increased to 5% in Q3 2023, ranking it number 5 in third-quarter sales after Tesla, Ford, Hyundai and Chevrolet in the U.S.
As more automakers such as Mullen Automotive Inc. (NASDAQ: MULN) develop diverse lines of electric vehicle models and fill the market with a growing number of options, Tesla may see its market share drop even further.
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