Tesla remains in a strong position in the electric vehicle (EV) market in the United States, presenting a significant challenge to its competitors. Despite many automakers launching new EV models and investing in EV and battery plants, very few are able to match Tesla’s sales volumes and profitability.
According to a Reuters analysis of EV sales data in the US during the first half of 2023, Tesla outsold its 19 closest competitors by a ratio of 10 to one. During this period, Tesla sold 325,291 vehicles, while its closest competitor, General Motors’ Chevrolet brand, only sold 34,943 units. Ford, Hyundai, and Rivian followed, but their sales volumes were significantly lower.
Among Tesla models, the Model Y and Model 3 took the first and second spots, respectively, with sales of 200,000 and 160,000 units in the first half of the year. In contrast, General Motors’ Chevrolet Bolt EV sold 35,000 units, and Ford Mustang Mach E sold 13,600 units. These figures are insufficient to achieve the production volumes needed to be profitable in a typical assembly plant, which needs to operate at 80% capacity or more.
Although electrified vehicle sales in the US market accounted for 8.9% of the total in the first half of 2023, up from 6.3% the previous year, the market remains fragmented. The Alliance for Automotive Innovation reported that 103 different models represented this market share. With so many choices available, Tesla’s dominance continues.
Ford’s recent decision to pause the construction of a $3.5 billion battery plant in Michigan reflects growing concern about whether the EV market in the US will expand quickly enough to support the numerous battery and assembly operations that are currently launching or under construction. Ford has already projected a higher-than-expected annual loss of $4.5 billion for its EV unit and has slowed down EV production speed.
While Tesla has lost some market share to new competitors, it still controls almost two-thirds of all EV sales in the US, while no other brand even reaches 10%. Analysts predict that EV sales will account for 8% of total vehicle sales in the US in the third quarter of 2023, up from 6.5% the previous year.
One driving factor behind this growth is declining prices, a trend led by Tesla. The company has been using its higher profit margins to lower prices and increase sales. The average selling price of EVs dropped to $53,376 in July 2023, down from nearly $70,000 a year earlier, according to Cox Automotive.
As the US EV market continues to evolve, it remains to be seen how Tesla’s dominance will be challenged and whether its competitors can achieve significant sales volumes and profitability, positioning themselves as true contenders in the EV space.
– Reuters article by Paul Lienert and Joseph White
– S&P Global Mobility data
– Data compiled by the Alliance for Automotive Innovation
– Cox Automotive analysis