Tesla, once the dominant force in the U.S. electric vehicle (EV) market, is now facing increasing competition from other automakers. According to Cox Automotive’s latest EV sales report, Tesla’s share of U.S. EV sales dropped below 50% for the first time, landing at 49.7%. While EV sales as a whole have grown, reaching approximately 8% of the total market, Tesla’s market share has been steadily declining since Q3 of 2019 when it stood at 82.5%.
The decline in Tesla’s market share coincides with a dip in Q2 deliveries, with the company delivering 443,956 vehicles during that period. While this is higher than the previous quarter, it falls short of the approximately 466,140 vehicles delivered a year ago. This indicates that Tesla is facing challenges in maintaining its sales momentum.
With Tesla’s market share slipping, other automakers are seizing the opportunity to gain ground in the EV market. Ford has emerged as the closest competitor to Tesla, capturing a 7.2% share of U.S. EV sales with its Mustang Mach-E, Lightning EV pickup, and E-Transit cargo vans. Kia, Hyundai, and BMW round out the top five.
In terms of brand performance in Q2, GM’s Cadillac stole the spotlight with a staggering 440% growth in EV sales. This growth was driven by its LYRIQ midsize EV SUV. Toyota also saw an increase in sales with its bZ4X, selling over 7,000 units in Q2 compared to just 2,000 a year ago. However, there are reports of significant discounts affecting these sales figures.
The increased competition in the EV market has led to price pressure, which is gradually boosting EV adoption. Automakers that can deliver the right product at the right price and provide an excellent consumer experience will lead the way in EV adoption, according to Cox Automotive’s Stephanie Valdez Streaty.
The success of Ford, Kia, and Hyundai can be attributed to their affordability. Kia’s EV6 crossover, EV9 large SUV, and Niro subcompact are appealing to a wider range of consumers, while Hyundai’s Ioniq 5 crossover and Ioniq 6 sedan offer similar affordability. Luxury brands like BMW and Cadillac excel in customer service, attracting higher-income buyers who value the dealer experience alongside the product mix.
In contrast, Mercedes, with its focus on luxury, high-priced EVs, has seen a decline in EV sales in Q2. As a result, the company has shifted its attention back to gas-powered vehicles and is no longer aiming to go fully electric by 2030.
As the EV market continues to grow, Tesla is facing fierce competition from other automakers. This competition is not only driving innovation but also making EVs more accessible and affordable for a broader range of consumers. While Tesla still holds a significant market share, it will need to adapt and remain competitive to maintain its leadership position in the evolving EV landscape.
