Tesla's once-dominant share of the U.S. electric vehicle market fell below 50 percent in the second quarter of the year even as battery-powered car sales surged to a record, according to new estimates released Tuesday by a research firm.
Tesla accounted for 49.7 percent of electric vehicle sales from April to June, down from 59.3 percent a year earlier as the Elon Musk-led company lost ground to General Motors, Ford Motor, Hyundai and Kia, research firm Cox Automotive said. It was the first time the company’s market share fell below 50 percent in a quarter, according to Cox. The firm, one of the leading auto industry researchers, estimates market share based on registrations, company reports and other data.
The numbers are the latest sign that Tesla is losing its dominance in a market it effectively created in 2012 when it introduced the Model S sedan. Before that car, very few electric vehicles were sold in the United States.
Overall, U.S. electric vehicle sales rose 11.3 percent from a year earlier, suggesting consumer demand for the technology remains healthy, though sales are no longer growing at the 40 percent-plus annual pace they did last year. Americans bought or leased more than 330,000 electric cars and trucks during the quarter, accounting for 8 percent of all new cars sold or leased in the three-month period. A year earlier, electric vehicles accounted for 7.2 percent of the market, Cox said.
A few years ago, Tesla didn't have many competitors and virtually no other company could match the range of its cars on a full charge or under acceleration. But established automakers have been introducing electric vehicles that can go 300 miles or more, matching and sometimes surpassing the capabilities of Tesla's cars.
There are more than 100 electric models available in the United States, according to an independent report. report released Tuesday by the Alliance for Automotive Innovation, an industry group. Prices have come down as supply and variety of models have increased, making it possible for more people to afford one.
Intense competition “is creating continued pressure on pricing, which is helping to slowly drive EV adoption,” Stephanie Valdez Streaty, chief industry insights officer at Cox, said in a statement.
Many consumers now buy electric cars from established manufacturers such as BMW and Ford, which have large dealer networks that can offer maintenance and repair services. Tesla sells cars online, and many consumers have said it can be difficult to get their cars repaired at the company's relatively small network of service centers.
Tesla’s sales have also been affected by its aging product lineup. Its best-selling vehicle, the Model Y, went on sale in 2020, making it dated by industry standards. Hyundai and its sister company, Kia, offer more electric models than Tesla, with competitive pricing and newer designs.
After a slow start over the past two years, GM has recently begun rolling out vehicles designed to be electric, rather than models converted from gasoline-powered cars. The company is also using U.S.-made batteries in a joint venture with LG Energy Solution. In a few months, GM is expected to begin selling an electric version of GM’s Chevrolet Equinox sport-utility vehicle for about $35,000, before factoring in a $7,500 federal tax credit.
Tesla said last week that its global sales fell 4.8 percent to about 444,000 cars in the second quarter from the same period a year earlier. The company doesn't break out its sales by country, but Cox estimates Tesla's U.S. sales fell 6.3 percent in the second quarter to 164,000 cars.
Musk may also have hurt Tesla sales with his embrace of right-wing politics on x, the social media platform he owns. EV owners tend to be liberal or left-leaning, and EV sales are highest in states that typically elect Democrats to state and federal offices.
In recent quarters, electric vehicle sales have not grown as fast as some automakers had hoped, but the market is still expanding faster than that for gasoline vehicles. The market for hybrid vehicles has recently grown even faster than that for all-electric vehicles; hybrids, which don’t need to be plugged in, allow consumers to avoid a patchy national public charging network.
Not all automakers are benefiting. Electric models including Mercedes-Benz, Polestar, Porsche and Volvo fell in the second quarter from a year earlier, Cox said. The firm said it would release detailed sales and market share figures on Thursday.
