As EV sales continue to grow in the US, albeit at a slower pace than expected, Tesla’s share of the market dipped below a key level as improved competitor EV offerings hit showroom floors.
Cox Automotive's latest EV sales report found that Tesla’s share of US EV sales fell below 50% for the first time, to 49.7%. This comes as Cox estimates overall EV sales grew to approximately 8% of the total market, up from the 7.2% seen in Q2 last year, in what it calls a “record-breaking” quarter.
“Despite Tesla’s declining sales, with its EV sales share now below 50% for the first time, the overall competitive landscape for electric vehicles is intensifying,” Stephanie Valdez Streaty, industry insights director at Cox Automotive, said in the report.
Looking over Cox’s dataset starting in 2019, Tesla’s market share hit a high of 82.5% in Q3 of 2019 and has been steadily declining ever since. The steepest drop has occurred in recent quarters, starting in Q4 2021, when Tesla’s market share stood at 77.5%. It fell to 50.2% in less than two years (Q2 2023) as new brands and EVs from legacy automakers hit the market.
Tesla's slide in market shares coincides with a dip in Q2 deliveries. Tesla said it delivered 443,956 vehicles during the second quarter, higher than the 386,810 vehicles globally delivered in the first quarter but lower than the approximate 466,140 delivered a year ago.
With Tesla now sitting at 49.7% of the market, Cox found that Ford's Mustang Mach-E, Ford Lightning EV pickup, and E-Transit cargo vans have put it in second place with a 7.2% share. Kia, its sister brand Hyundai, and BMW rounded out the top five.
Digging deeper into the fastest-growing brands in Q2, GM’s Cadillac took top honors with EV sales growth of over 440%, powered by its LYRIQ midsize EV SUV. Though Cadillac’s LYRIQ saw its initial rollout delayed as GM worked out kinks in its Ultium EV platform, sales momentum has been growing since the start of the year. Toyota has seen its lone EV — the bZ4X — grow sales to over 7,000 units in Q2 (from 2,000 a year ago), though reportedly with big discounts.
“This increased competition is leading to continued price pressure, gradually boosting EV adoption, Cox’s Valdez Streaty said. “Automakers that deliver the right product at the right price and offer an excellent consumer experience will lead the way in EV adoption.”
Greater affordability could be spurring sales at Ford, Kia, and Hyundai. Kia's moderately priced EV6 crossover, EV9 large SUV, and Niro subcompact are reaching larger segments of the market, along with Hyundai's similarly priced Ioniq 5 crossover and Ioniq 6 sedan.
Luxury brands like BMW and Cadillac are likely excelling in the customer service arena, Valdez Streaty noted, with higher-income buyers valuing dealer experience alongside product mix in their buying decisions. BMW EVs like the BMW iX SUV, i4 coupe, and i7 luxury full-size sedan have buoyed sales.
Conversely, BMW rival Mercedes, which leaned heavily into luxury, high-priced EVs, has seen EV sales fall in Q2 (down 22.3%), as its offerings at lofty prices have not hit home with consumers. Mercedes has now pivoted back to gas-powered vehicles and no longer sees itself going fully electric by 2030.
Pras Subramanian is a reporter for Yahoo Finance covering the auto industry. You can follow him on Twitter and on Instagram.
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