Tesla faces losing its EV market dominance in America

Tesla Inc. is at risk of losing its long-held dominance in the US electric vehicle market. Over the past year, Tesla sold approximately 618,000 EVs, while other manufacturers collectively sold around 597,000. Traditional automakers, including General Motors, Hyundai, and Ford, are rapidly closing the gap with new models. Despite remaining the largest US EV-maker, Tesla faces challenges from increased competition and reliance on just two models for 95% of its sales..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Join us for BizNews' first investment-focused conference on Thursday, 12 September, in Hermanus, featuring top experts like Frans Cronje, Piet Viljoen, and more. Get insights on electricity and exploiting SA's gas bounty from new and familiar faces. Register here..By Tom Randall.Tesla Inc. is on the verge of losing a key bragging right it's held for the past six years: outselling all EV competitors in the US combined. .___STEADY_PAYWALL___.In the 12 months through May, Tesla sold approximately 618,000 electric cars in the US, compared with about 597,000 fully electric vehicles sold by other manufacturers, according to the latest figures from Marklines, a provider of monthly auto industry sales data. Next week, carmakers are slated to report second-quarter sales, which will include popular new models from General Motors Co., Hyundai Motor Co. and its affiliated Kia Corp. .Tesla has made the top-selling EV in the US ever since its Model S luxury sedan blew past the Nissan Leaf in 2015, and has sold more EVs than the rest of the industry combined since the Model 3 took off in 2018. But after an initially slow response, traditional automakers have been steadily closing the gap. In the first quarter, Tesla's sales dropped 13% year-over-year — enough to trigger a panic about the US market — while sales rose at a scorching pace for six of the 10 biggest EV makers, climbing anywhere from 56% at Hyundai/Kia to 86% at Ford. April and May continued the trend. .Read more: Tesla shareholders support Musk's pay plan and Texas move.Counting cars.Tesla could lose its US market majority by the time this month's sales are tallied, though it's difficult to tell exactly when the balance will tip. Unlike other carmakers, Tesla only reports sales quarterly and doesn't break out global sales by region. Analysts estimate the company's monthly US deliveries using a hodgepodge of state registration data and international sales reports. .What is apparent is that Chief Executive Officer Elon Musk's polarizing politics are chipping away at Tesla's dominance. So is a glaring gap in the product cycle that's left the carmaker reliant on just two vehicles for 95% of its sales, says Stephanie Valdez-Streaty, director of industry insights at Cox Automotive. Rivals are now flooding the market in segments where Tesla has nothing to offer. ."Tesla just has a lot more competition now," Valdez-Streaty said. "Elon really moved the industry forward with electrification, but he's trying to compete against other brands with new models out — and Tesla doesn't have any new models." .More than a car company.To be clear, Tesla remains the biggest EV-maker in the US by a long shot. Over the past 12 months, it sold more than five times as many electric cars in the country as its closest rival, Hyundai/Kia. Tesla also makes the best-selling car in the world, the Model Y, and sells more fully electric vehicles globally than anyone else. .It's also the world's most valuable car company, even after a major slump in the stock price. Tesla is worth around $575 billion — less than half of its peak $1.2 trillion market cap in 2021, but still almost 85% more than the second biggest automaker, Toyota Motor Corp..The few companies that have been able to claim a market majority similar to Tesla's in the US are peerless in their industries. Apple has it for smartphones, Google for internet search, and Nvidia for AI chips. Such unrivaled dominance helped each of those tech giants reach stock valuations of more than $2 trillion. And like those companies, Tesla also has more diverse aspirations. Musk has said its consumer automotive business will eventually be dwarfed by its clean-energy division, Cybercab taxi service and humanoid robots..Morgan Stanley analyst Adam Jonas said last week that Tesla's stock price remains at risk as long as investors see it as auto company stuck in an increasingly competitive market. But in the long term, Jonas anticipates Tesla will be valued like the other tech companies that moved beyond their first conquests. "The car is to Tesla what the video game chip is to Nvidia. The car is to Tesla what selling books is to Amazon," he said. .For now, though, the car business generates more than 90% of Tesla's revenue. And it's worth noting that both of Jonas's examples were able to retain their core market majorities, in video game chips and books. With EVs, Tesla may not be able to do the same. .Read also:.Who is Elon's younger brother Kimbal Musk, the Tesla director in a cowboy hat?🔒 Institutional investors flee Tesla amid growth concerns: What next for the electric car giant?🔒 Musk explains redirection of Tesla AI chips to X Corp, raises concerns.© 2024 Bloomberg L.P.

Tesla faces losing its EV market dominance in America

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