The media are reporting that Tesla’s (TSLA) share of the US EV market is declining as “competitors are taking over,” but there’s more to the story. The data is too early to give the full picture.
Tesla has been dominating the electric vehicle market for years now. The word “dominating” is not an exaggeration. Despite a significant increase in electric models from other automakers, Tesla has been able to maintain a 60 to 70% market share.
Today, the media are reporting that Tesla’s domination in the US EV market is “cooling down” because of registration numbers coming for January and February.
They are basing this on Tesla having 95,829 new U.S. registrations for the two months, a massive 35 percent increase over the same period last year.
Despite the increase in deliveries, the media notes that the automaker now holds a 58% share of the EV market in the US. They are attributing this decline in market share to competitors ramping up EV sales, which is partly true.
However, it’s not an excellent way to compare to Tesla sales due to the difference in sale models. Tesla’s deliveries are cyclical throughout a given quarter in the US because the automaker builds vehicles in the US to export to other markets early in the quarter. Therefore, deliveries in the US are concentrated in the last month of the quarter – in this case, March.
Behind Tesla’s lead, GM, Ford, and Volkswagen are the ones with the most significant market share, thanks to increased deliveries of the Chevy Bolt EV/EUV, Mustang Mach E, and VW ID4.
Electrek’s Take
We always knew that Tesla would keep growing its deliveries in the US but also that its market share would go down as more EV models are available in higher volume from competitors.
Top comment by Preston
The real issue is Tesla's market share in the auto market. I don't think the current data is sufficient to predict where Tesla will be by the time the whole market has transitioned to EVs. All the manufacturers (including Tesla) will have significantly expanded offerings. So Tesla will compete in more market segments, but they'll have more to compete against. From a stock perspective, what matters is how fast Tesla is growing; what other companies do only matters to the extent that they threaten Tesla's growth and margins (and I'm not arguing that isn't happening).
But this is not the right way to look at the data.
Due to Tesla using a different sales model than the dealership model used by virtually every other automaker, it is important to look at deliveries over an extended period.
I think if we include March deliveries, which should be available within the next month, the market share won’t change much.
But either way, 58% is still extremely strong and shows that other automakers really need to ramp up the availabilities of their electric vehicles in high volumes.
FTC: We use income earning auto affiliate links. More.
Comments