Tesla losing ground in this major EV market, claims study
Tesla owns far more electric vehicle market share than any other car company in the world. However, this dominant market position is likely to become thinner faster than ever and drop significantly by 2025, forecasts S&P Global. The forecast claims that Tesla's market share in the US electric vehicle market will drop from 65 per cent to less than 20 per cent in 2025. The reason behind this is multi-pronged pressure from both luxury and non-luxury car brands, who are increasingly bringing in new products in the EV space. The data firm has also predicted that the number of battery-electric vehicles will grow from the current 48 in the US market to 159 by the end of 2025, at a much faster pace than Tesla will be able to add factories.
Interestingly, Tesla has already lost a sizeable chunk of its market share over the last two years. Just two years ago, the Elon Musk-led auto company owned a market share of 79 per cent in the United States EV market, which has now come down to 65 per cent. The study claims that Tesla's position is changing as new and more affordable EV options arrive, offering equal or better technology at a time when consumer choice and consumer interest in electric vehicles are growing fast. It also said that Tesla's ability to retain a dominant market share would be heavily challenged in the future.
The report points out one of the major hurdles to Tesla's growth. The EV manufacturer doesn't play mainstream anymore. Tesla Model 3, which is the most affordable car from the brand, is priced at $46,900, which is pretty high for a large number of buyers. The barrier to entry prices leaves out many customers. However, Tesla is planning to launch a refreshed Model 3 late next year, which could come with a cheaper price tag, as the automaker has hinted. But, despite the effort to bring down the prices of its cars, the task of retaining the market share in the highly competitive and bulging EV space is becoming harder for Tesla.
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Overpromising and under-delivering have also impacted 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 is prolonged by the automaker's frequent production delays. This makes many prospective buyers look for different options, hurting Tesla's sales numbers and, eventually, the market share of the company as well.