Tesla’s recent decline in sales growth has caused concern among some automakers, but this downturn seems to be specific to Tesla rather than a reflection of the overall electric vehicle (EV) market. While EV sales as a whole have been affected, data from Bloomberg and Cox Automotive suggests that the decline is primarily due to weaker demand for Tesla vehicles. In contrast, other automakers that have expanded their EV lineups, such as Ford, Mercedes-Benz, BMW, Toyota, Rivian, Hyundai, and Kia, have seen healthy increases in pure-electric sales.
Ford has experienced the most significant growth, driven by models like the F-150 Lightning and Mustang Mach-E. Meanwhile, Hyundai and Kia have seen the least growth among the best-selling EVs, with models like the Ioniq 6 and EV6. Overall, major manufacturers have witnessed notable increases in quarterly EV sales expansion in 2024. Ford’s EV sales grew by 86.1%, followed by Toyota at 85.9%, Mercedes-Benz at 66.9%, Rivian at 58.8%, BMW at 57.8%, and Hyundai/Kia at 56.1%.
Although Tesla’s sales growth declined by 13%, it still outperformed competitors like GM and Volkswagen. Tesla sold 140,187 vehicles in Q1, while GM saw a decline of nearly 21% in EV sales growth and Volkswagen experienced a milder decline of 12%. Additionally, Tesla maintains a 51% share of the EV segment in America, demonstrating its dominance in the market.
The negative sentiment surrounding Tesla and EV sales in 2024 is mostly due to the projection of Tesla’s growth decline onto the entire EV market. However, this misread fails to acknowledge that other brands are gaining customers who are turning away from Tesla. Furthermore, production challenges have affected sales growth for some automakers. Tesla temporarily halted production of its Model 3 to implement updates, while GM faced a decline in EV sales growth due to the discontinuation of its most popular EV, the Chevy Bolt.
Despite these challenges, EV sales are not grinding to a halt. In fact, when excluding the Tesla Model 3 and Chevy Bolt, EV sales growth in America actually increased by 23%. This contraction in growth is expected as the EV segment matures, and analysts from Cox Automotive note that segment growth typically slows as volume increases. Therefore, the EV boom has not yet given way to a bust.
Looking ahead, analysts predict that EV sales will account for 10% of total car sales in the U.S. by the end of 2024, up from the current 7.3% at the beginning of the year. This projection highlights the continued growth potential of the EV market.