As Elon Musk have recently bought Twitter while claiming to be freedom of speech champion, the market share of his primary brand Tesla is shrinking.
But this reduction is not just a small cut or incremental. It is projected that Tesla share in the US market share will have be less than 20 percent by 2025 with the introduction of cheaper models by the rivals.
Moreover, the number of EV (electric vehicle) models currently stands at 48 but it would be 159 by 2025.
According to report a prepared by S&P Global Mobility, Tesla’s share of new registered electric vehicles in the US stood at 65 percent in the third quarter, representing down from 71 percent last year and 79 percent in 2020.
This trend isn’t unexpected but the rate of the decline should be alarming for Musk and concerning for investors in his autos and energy company.
It is not a surprise that Tesla shares closed down by about a point to $180 on Tuesday. Tesla’s stock has declined by almost half year to date.
Tesla no more enjoys a monopoly as fully electric models with equal or better technology are now available in a price range below $50,000. Its entry-level Model 3 starts at about $48,200 with shipping fees, but the vehicles typically retail for higher prices with options.
“Given that consumer choice and consumer interest in EVs are growing, Tesla’s ability to retain a dominant market share will be challenged going forward,” the report says.
Tesla adopting but is it too late?
Meanwhile, Tesla cognizant of the changing realities is developing a revamped version of Model 3 aimed at cutting production costs and reducing the components and complexity in the interior.
“We don’t want to talk exact dates, but this is the primary focus of our new vehicle development team, obviously,” Musk recently said, adding that Tesla had completed “the engineering for Cybertruck and for Semi.”
He described the future vehicle as something “smaller,” that will “exceed the production of all our other vehicles combined.”
But the question remains: Is it too late given the end of monopoly and emergence of so many new options?
It is a known fact that it is very difficult, if not impossible, to regain the market once new players enter the competition.
However, S&P Global Mobility an expert says Tesla’s unit sales are expected to increase in coming years despite the decline in its market share.
Who are competitors?
The growth in EVs is largely coming from current owners of Toyota and Honda vehicles. Both of the automakers are well-known for fuel-efficient vehicles but have been slow to transition to all-electric models.
To help curb carbon and other emissions from traditional gas-powered vehicles, several states and the federal government are encouraging the transition to fully electric vehicles with incentives such as tax breaks.
Transportation is responsible for 25 percent of carbon emissions from human activity globally, according to estimates by the nonprofit International Council on Clean Transportation.