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Tesla is still the dominant U.S. electric vehicle manufacturer, according to an S&P Global Mobility report. That dominance won’t last long, however, as rival automakers undercut the company’s prices.
In the third quarter of 2022, Tesla’s U.S. market share of newly registered electric vehicles was 65%, down from 71% in 2021. According to the S&P forecast, Tesla’s EV market share will drop to less than 20% by 2025 with as much as 159 EVs available, compared to just 48 today.
In a statement, S&P said, “Tesla’s position is changing as new, more affordable options emerge, offering equal or better technology and manufacturing.”
“As consumer choice and consumer interest in electric cars increases,” the statement continued, “Tesla’s ability to maintain a dominant market share will be tested going forward.”
Fortune quoted S&P deputy director Stephanie Brinley as reportedly saying Tesla will not lose sales regardless of reduced market share. “The EV market in 2022 is a Tesla market,” said Brinley, “and will remain so as long as competitors are tied to production capacity.”
Even as consumer-friendly competitors like Ford and Chevrolet start ramping up their EV assembly lines, Tesla will face luxury car competition from the likes of BMW and Mercedes-Benz alongside direct rivals Lucid and Rivian.
S&P’s report noted that new buyers of electric vehicles in 2022 tended to switch to electric after having gas-powered Hondas and Toyotas. Fortune reports that Brinley also added that Tesla vehicles made up the largest share of registered electric vehicles.
