Is Market Share The Right Metric For Evaluating Tesla & EV's Future?

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Posted on EVANNEX on November 03, 2021, by Charles Morris

“Americans aren’t buying electric vehicles, they’re buying Teslas,” reads a recent CNBC headline, and it’s a fair assessment. In the US, Tesla’s share of the EV market looks like Bob Marley’s share of the Reggae market. According to auto industry analyst IHS Markit, 79% of the EVs sold in the US in 2020 were Teslas.

Tesla enjoys a strong share of the EV market everywhere, but its lead is much larger stateside than it is in China and Europe, where stringent emissions regulations have forced domestic automakers to turn up the voltage quickly. In the absence of meaningful government incentives, US automakers have treated EVs as an R&D project, and this has allowed Tesla to dominate the still-small market. (Industry-watchers expect EVs to represent a little less than 4% of the total US auto market in 2021.)

“It’s no surprise that Tesla’s still dominating electric vehicle sales, because they’re the only ones that really have viable products in full swing,” IHS Markit Associate Director Michael Fiske told CNBC.

This is about to change. US automakers are ramping up their EV efforts, and they’re starting to target the types of vehicles that Americans buy. Ford’s F-150 Lightning is already in pre-production. It’s almost certainly going to beat Tesla’s Cybertruck to market, and there’s every reason to believe that it could be a strong seller, if Ford chooses to push it.

Chevy’s electric Silverado may join it on the streets in a year or so. Scrappy startups are also challenging the young king—Rivian and Lucid are already delivering vehicles. And the Chinese are coming—Xpeng and NIO are already shipping product to Europe, and the Chinese/Swedish Polestar is delivering vehicles in the US.

Pretty much all the pundits predict that Tesla will soon be toppled from its electric throne. “In a growth market, it’s extremely challenging to maintain majority market share,” says Michael Fiske. “As we start to move toward a larger and really significant number of manufacturers that are going to be playing in the space, Tesla has to lose share.”

IHS Markit expects Tesla’s market share of pure EVs this year to drop to 56% in 2021, and to 20% by 2025. LMC Automotive, another auto industry forecasting firm, expects GM to supplant Tesla as the largest EV seller in the US market by that date (so does GM CEO Mary Barra).

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