Tesla Inc.'s once-dominant share of the U.S. electric vehicle market fell below 50% in the second quarter of this year, even as sales of battery-powered cars surged to an all-time high, according to new estimates released by a research firm on Tuesday.
Tesla accounted for 49.7% of electric-vehicle sales from April through June, down from 59.3% in the same period a year ago, as Elon Musk's company was edged out by General Motors Co., Ford Motor Co., Hyundai Motor Co. and Kia Motors Co., according to research firm Cox Automotive. It was the first time the company's market share had fallen below 50% in a quarter, Cox said. The leading auto research firm estimates market share based on registrations, company reports and other data.
The figures are the latest sign that Tesla is losing the market dominance it effectively created with the launch of its Model S sedan in 2012. Before that car, very few electric vehicles were sold in the United States.
Overall, U.S. electric vehicle sales rose 11.3% year over year, suggesting that consumer demand for electric vehicle technology remains healthy, even if it's no longer experiencing the 40%-plus annual growth seen last year. Americans bought or leased more than 330,000 electric cars and light trucks during the quarter, accounting for 8% of all new vehicles sold or leased in the three months. A year ago, electric vehicles made up 7.2% of the market, Cox said.
A few years ago, Tesla had few competitors, and few could match the range its cars could offer on a full charge or when accelerating. But now major automakers are rolling out electric cars with ranges of 300 miles or more, matching and sometimes surpassing Tesla's performance.
There are more than 100 electric vehicle models available in the U.S., according to a separate report released Tuesday by the Coalition for Automotive Innovation, an industry group. As supply and models increase, prices have fallen, making them affordable for more people.
“Intense competition will continue to drive pricing pressures and drive EV adoption slowly,” Stephanie Valdes Streety, director of industry research at Cox, said in a statement.
Currently, many consumers buy electric vehicles from major automakers such as BMW or Ford, which have large dealer networks that can provide maintenance and repairs. Tesla sells its cars online, and many consumers say it's difficult to get their cars repaired at the company's relatively small network of service centers.
Tesla's sales have also suffered from an aging lineup: The company's best-selling car, the Model Y, was launched in 2020 and is therefore outdated by industry standards. Hyundai and its sister company Kia offer more electric vehicle models than Tesla, with competitive prices and newer designs.
GM got off to a slow start in recent years, but recently began releasing vehicles designed as electric cars rather than converted gasoline-powered models. The company is also using U.S.-made batteries in a joint venture with LG Energy Solutions. Within a few months, GM will begin selling an electric version of its Chevrolet Equinox sport utility vehicle for about $35,000 before a $7,500 federal tax credit.
Tesla said last week that its global sales in the second quarter were down 4.8% from the same period in 2018, to about 444,000 vehicles. The company doesn't break out country-by-country sales figures, but Cox estimates that Tesla's U.S. sales in the quarter were down 6.3%, to 175,000 vehicles.
Musk may also have hurt Tesla's sales by embracing right-wing politics on his social media platform, X. Electric car owners tend to be liberal and left-leaning, and electric car sales are highest in states that elect Democrats to state and federal office.
Electric vehicle sales haven't grown as much as some automakers had expected in recent quarters, but the market is still growing faster than gasoline-powered cars. The market for hybrids has also grown faster than fully electric cars in recent years, because hybrids don't need to be plugged in, allowing consumers to avoid the hassle of a spotty national public charging network.
Not all automakers are benefiting. Mercedes-Benz, Polestar, Porsche and Volvo all saw sales of electric models decline in the second quarter compared with the same period a year ago, Cox said. The companies will release detailed sales and market share figures on Thursday.
