Tesla faces significant decline in market share as consumers shift towards competitors' products, with potentially further deterioration predicted ahead
In the realm of electric vehicles (EVs), Tesla, once a dominating force, has experienced a significant shift in its fortunes. The Californian automaker has not launched a hit car with an affordable price in years, and its sales have flatlined compared to competitors.
Recently, a new player has emerged in the EV market, Slate, a startup backed by Jeff Bezos. Slate promises ultra-customizable small trucks with a starting price of $20,000, a price point Tesla has yet to reach in its EV offerings.
Tesla's stock, however, has seen a 6% rise over the past five days, a move Wall Street analysts attribute to the company's strategy. Tesla's board has proposed a $1 trillion compensation package for Elon Musk, pegged on the promise that future technologies will skyrocket the company's valuation to $8.5 trillion over the next decade.
This shift in strategy is evident as Tesla moves away from traditional automaking towards AI and robotics. The company promises humanoid robots and autonomous vehicles without steering wheels or rearview mirrors.
However, Tesla's latest offerings have not been meeting the market demand. In Europe in early 2025, Volkswagen replaced Tesla as the leader in electric car sales, with an 11% market share, ahead of BMW (9.5%) and Tesla (5.3%). The best-selling electric model in Europe, however, remained the Tesla Model Y.
In the United States, the story is similar. Tesla sold less than 40% of America's new EVs in August for the first time in nearly eight years. Only 38% of new EV owners drove a Tesla off the lot in August, with shoppers opting for newer, cheaper models from rivals like Chevy, Hyundai, and Kia.
Despite this sales slump, Tesla's Model Y, despite a 13% sales decline in the first half of 2023, is expected to launch a cheaper product in the fourth quarter. Competition is heating up, with Ford, Chevy, and Volkswagen achieving chart-topping sales for their EV models, and Nissan introducing a remodeled Leaf SUV with a starting price of $30,000 and a range of 300 miles.
Tesla's silence on new vehicle models or updates to its current cars in its recent future strategy plan, 'Master Plan 4', has raised questions about the company's direction. Morningstar analyst Seth Goldstein believes Tesla's long-term strategy makes sense, shifting the company from an automaker to focusing on autonomous driving software and robotics. Goldstein also expects Tesla's sales to improve in the second half of 2025.
Despite the challenges, Tesla's Cybertruck, its last big release, has sold around 52,000 copies in two years since its $72,000 launch. The company did not respond to the Daily Mail's request for comment regarding the sales slump.
The EV market is rapidly evolving, and Tesla, once the undisputed leader, finds itself in a competitive landscape. Whether the company can regain its former glory remains to be seen.
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