For more than a decade, California-based EV company Tesla has been the dominant player in the nascent electric vehicle market. After launching the original Tesla Roadster back in 2008, Tesla was the first company to begin mass producing electric vehicles, and by 2021, it had eclipsed most major car makers in value.
However, Tesla’s monopoly on the electric vehicle industry will soon be threatened as legacy automakers invest more into developing and selling EVs. As governments across the world set increasingly strict emission standards and deadlines to ban the sale of new combustion engine vehicles, legacy automakers will adopt electrification en masse.
And unlike, Tesla which has been in the car-making game for a little over a decade, car companies such as Ford and General Motors have been around for decades and have plenty of experience developing new vehicle technologies, mobilizing raw materials and ramping up production. Furthermore, they have the billions of dollars in capital they need to make the transition from fossil fuel cars to zero-emission electric cars possible.
According to Dan Ives, an analyst from Wedbush Securities, there’s an electric vehicle “arms race” going on and Tesla has a giant bulls-eye on its back. Even though Tesla likely won’t feel the pressure of additional competition soon, legacy automakers are already gunning for the pioneering EV maker’s spot at the top of the electric vehicle industry.
Even though most of these auto makers are just beginning to mass produce electric cars, analysts say they have the advantage over Tesla because they have the resources needed to quickly scale up production. As legacy automakers begin to flood the market with more options, some of them more affordable than Teslas, Elon Musk’s company will likely lose some of its market share.
Tesla is looking at competition from Hyundai, Toyota, GM, Ford, Mercedes, Porsche and Jaguar. Still, Professor Tammy Madsen from Santa Clara University’s Leavy School of Business says these firms will need a significant shift in thinking and operation if they are to catch up to and even surpass Tesla. The American EV maker has been at the forefront of electric vehicle innovation and is projected to experience major growth in the coming years.
As such, Madsen states that legacy automakers will have to move at an even faster rate if they wish to catch up to Tesla. Once legacy auto makers can solve most of the unique problems involved with developing, mass producing and selling electric vehicles, Tesla will have to contend with competition from companies with larger capital reserves, decades of car-making experience and the ability to produce millions of vehicles per year. EV startups such as Mullen Automotive Inc. (NASDAQ: MULN) also want a share of the electric vehicle market, so competition is going to be stiff.
NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN
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