Photo: Tesla | Edited
You can find a set of data or a study to prove anything these days, although the reality doesn't change. Fixating on Tesla's EV market share can be comforting for Tesla skeptics, but it doesn't change the fact that Tesla is growing, eating into traditional carmakers' pie.
From time to time, someone writes an article that depicts Tesla as the loser of the EV market, and they back this claim with valid scientific data. Most recently, Experian released the first-quarter EV sales in the US, showing that traditional carmakers are eating Tesla's breakfast. This prompted news outlets to show how Tesla is doomed, on the brink of collapse, a story we've kept reading from various sources for the past I-don't-know-how-many years.
Undeniably, it has the hard facts to support it. The numbers show that Tesla has a smaller piece of the pie than it used to. According to Experian data, from 72% of the market share in 2022, Tesla slipped to 60%. Cox Automotive shows Tesla at 62.4% EV market share, which is not far from the Experian data. Both studies can only estimate Tesla's market share in the US, considering that it doesn't break out US sales from global numbers.
Ultimately, both studies show one thing and one thing only: other carmakers have started to sell electric vehicles. People who expected Tesla to be the only EV maker and keep the 100% market share are divorced from reality. Ten automakers sold EVs in the quarter, compared to only four in the first quarter of 2022. The Experian study does show that Tesla grew slower than the rest of the EV market. If the market was stable and no new players entered, that might've been a problem. When new players add new EV models, their market share has to come from somewhere.
Focusing on the EV market share is comforting for Tesla skeptics, even if the absolute numbers show that Tesla is not standing still. It's not like Tesla is shrinking when its market share does. Its factories are not laying off workers. On the contrary, Tesla plans new gigafactories to build all the EVs it intends to sell in the next decade. Fixating on the EV market share makes the critics lose sight of the elephant in the room. Tesla may be the incumbent in the EV market, and its market share could be up for grabs, but so are the traditional carmakers in the larger car market.
The EV market share may have been relevant when electric cars weren't competing with ICE vehicles. Things have changed, and EVs have entered the mainstream. They are not attracting customers because they are different or cool but because their technology is better. They are way more efficient than gas-powered vehicles, cost less to maintain, and already crossed the affordability threshold. That's why looking at the EV market share is myopic.
Although traditional carmakers claim market share in the EV segment, they bleed share in the overall market. Tesla has constantly grown its automotive piece of the pie in the US and elsewhere. The EV maker reported a 4% market share in the US and over 2% in Europe and China. The Model Y was the best-selling vehicle of any kind in Europe and the best-selling vehicle except pickups in the US. Looking at the global market, Tesla has already surpassed Audi and is on track to overtake BMW and Mercedes-Benz by the end of the year.
It's not the gloomy picture some want to portray. Tesla announced a 1.8 million sales target for 2023, and the first-quarter result puts it on track to achieve it. It's also the only company that makes a profit from selling electric vehicles. Tesla makes more money from selling EVs than most carmakers make from their traditional car business, and that will not change soon.
Undeniably, it has the hard facts to support it. The numbers show that Tesla has a smaller piece of the pie than it used to. According to Experian data, from 72% of the market share in 2022, Tesla slipped to 60%. Cox Automotive shows Tesla at 62.4% EV market share, which is not far from the Experian data. Both studies can only estimate Tesla's market share in the US, considering that it doesn't break out US sales from global numbers.
Ultimately, both studies show one thing and one thing only: other carmakers have started to sell electric vehicles. People who expected Tesla to be the only EV maker and keep the 100% market share are divorced from reality. Ten automakers sold EVs in the quarter, compared to only four in the first quarter of 2022. The Experian study does show that Tesla grew slower than the rest of the EV market. If the market was stable and no new players entered, that might've been a problem. When new players add new EV models, their market share has to come from somewhere.
Focusing on the EV market share is comforting for Tesla skeptics, even if the absolute numbers show that Tesla is not standing still. It's not like Tesla is shrinking when its market share does. Its factories are not laying off workers. On the contrary, Tesla plans new gigafactories to build all the EVs it intends to sell in the next decade. Fixating on the EV market share makes the critics lose sight of the elephant in the room. Tesla may be the incumbent in the EV market, and its market share could be up for grabs, but so are the traditional carmakers in the larger car market.
The EV market share may have been relevant when electric cars weren't competing with ICE vehicles. Things have changed, and EVs have entered the mainstream. They are not attracting customers because they are different or cool but because their technology is better. They are way more efficient than gas-powered vehicles, cost less to maintain, and already crossed the affordability threshold. That's why looking at the EV market share is myopic.
Although traditional carmakers claim market share in the EV segment, they bleed share in the overall market. Tesla has constantly grown its automotive piece of the pie in the US and elsewhere. The EV maker reported a 4% market share in the US and over 2% in Europe and China. The Model Y was the best-selling vehicle of any kind in Europe and the best-selling vehicle except pickups in the US. Looking at the global market, Tesla has already surpassed Audi and is on track to overtake BMW and Mercedes-Benz by the end of the year.
It's not the gloomy picture some want to portray. Tesla announced a 1.8 million sales target for 2023, and the first-quarter result puts it on track to achieve it. It's also the only company that makes a profit from selling electric vehicles. Tesla makes more money from selling EVs than most carmakers make from their traditional car business, and that will not change soon.
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