Tesla faces hotter competition than ever, as carmakers look to disrupt its U.S. market dominance
or years, one carmaker has stood out as the leader for electric vehicles: Tesla. But the company now faces a growing slate of deep-pocketed competitors, including General Motors, Ford, and Mercedes-Benz, looking to disrupt its market dominance.
Tesla’s electric vehicle market share is likely to decline from about 70% in 2021 to the “low teens” by 2025 as a result of the onslaught of EVs coming from other manufacturers, predicts John Murphy, the managing director and lead auto analyst at Bank of America Merrill Lynch. “Demand is a little harder than it would otherwise be,” Musk said. “But as I said earlier, we are extremely confident of a great Q4.”
On Monday, less than a week later, the company cut the starting prices for its Model 3 and Model Y cars by as much as 9% in China amid concerns over demand, reversing an industry-wide trend of increasing prices this year. Murphy says the price cuts in China are not typical of a company that has low supply and high demand, and could suggest a “potential weakening in one of the key growth markets in China.
“Other car companies are going to have to do a lot more advertising to let customers know they have EVs,” Krebs says. “Tesla has only ever had EVs—that’s what they’re known for.” “Tesla is certainly moving faster now than it has historically,” he says, pointing to their new factories in Austin, Tex. and Berlin. “But we believe they should have moved faster and pressed their advantage before the competition started catching up.”