Tesla has more electric vehicle market share than any other car company in the world. However, S&P Global predicts that by 2025, this market dominance may weaken faster than ever and decline significantly. The forecast says Tesla’s market share of the U.S. electric vehicle market will drop from 65% to less than 20% by 2025. The reason behind this is the multi-pronged pressure from luxury and non-luxury car brands that are increasingly introducing new products in the EV segment. The data firm also predicts that the number of all-electric vehicles on the U.S. market will grow from 48 currently to 159 by the end of 2025, far faster than Tesla can add factories.
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Interestingly, Tesla has lost considerable market share over the past two years. Just two years ago, the Elon Musk-led car company had a 79 percent market share of the U.S. electric vehicle market, and today it has dropped to 65 percent. With the arrival of new and more affordable electric vehicle options, Tesla’s position is changing, offering equal or better technology at a time when consumer choice and consumer interest in electric vehicles is growing rapidly, the study said. . It also said Tesla’s ability to maintain a dominant market share would be seriously challenged going forward.
The report points to one of the main obstacles to Tesla’s growth. EV makers no longer play a mainstream role. The Tesla Model 3 is the most affordable car in the brand, and at $46,900, it’s a pretty steep price for a volume buyer. The price barrier to entry deters many customers. However, as the automaker has hinted, Tesla plans to launch a refreshed Model 3 later next year, which could come with a lower price tag. But the task of maintaining market share in the competitive and expanding electric vehicle space has become increasingly difficult for Tesla despite its efforts to bring down the prices of its vehicles.
Overpromising and underdelivering has also affected the automaker’s brand image. Tesla has promised some exciting products in the past. However, the difference between the unveiling and the actual product launch has been stretched out due to the automaker’s frequent production delays. That left many potential buyers looking for different options, hurting Tesla’s sales numbers and, ultimately, the company’s market share.
First published date: Dec 02, 2022 at 16:03 PM CST