Tesla Is Losing Its Market Dominance
But why?
Tesla has been at the top of the EV world for over a decade. Indeed, they still control by far the largest portion of the EV market of any manufacturer. But their slice is shrinking, and the competition is catching up rapidly! Tesla sold 61.7% of all EVs in the US in Q1 2023, but that figure dropped to 51.3% for Q1 2024. Meanwhile, nine EV manufacturers experienced a 50% growth in EV sales in Q1 2024 compared to Q1 2023, namely BMW, Cadillac, Ford, Hyundai, Kia, Lexus, Mercedes, Rivian and Vinfast. If this trend continues, it will only be a few years before Tesla no longer dominates the EV world. But why is this happening?
It only takes a cautionary glance at Tesla’s main rivals to see why they are losing ground to them. Take the IONIQ 6 Long Range 2WD (also known as the SE Long Range in the US). This brilliant EV costs only $43,600, almost exactly the same amount as the $42,740 Tesla Model 3 Long-Range Dual Motor.
The IONIQ 6 has 225 hp and a 0–60 mph time of 7.4 seconds. Its 77.4 kWh 800V battery gives it a WLTP range of 382 miles and an insane 10% to 80% charge time of just 16 minutes! This is thanks to the pack’s 233 kW peak charge rate and 200 kW average rate, allowing the pack to add 800 miles of range per hour of charging! It also has a towing capacity of 1500 kg (3,300 lbs) and V2L capability, allowing you to use the car’s battery to power your house and devices or charge other EVs.
The Tesla is undoubtedly faster, with 491 hp and a 0–60 mph time of 4.4 seconds. On paper, it also goes further, with a WLTP range of 391 miles, though in the real-world tests, both get just over 300 miles on a single charge. The Tesla’s 78.1 kWh 400V battery pack charges significantly slower, despite having a higher peak charge rate of 250 kW. This is because its average charge rate is only 124 kW. This means a 10% to 80% charge takes 27 minutes, the equivalent of adding 490 miles of range per hour. That’s 49% slower than the Hyundai! The Tesla also doesn’t have V2L capability and has a towing limit of 1,000 kg.
If you want a faster car, the Tesla is the obvious choice. But if your priorities are anything else, the Hyundai is the better buy. It even comes with a longer warranty!
But, the IONIQ 6 is about to get even cheaper, as Hyundai is gearing up to open its own US EV battery plant. This will enable them to use the same tax credits that make Teslas so cheap, making the IONIQ 6, along with its sister cars, the IONIQ 5, Kia EV6, Kia EV9 and upcoming EV3, significantly cheaper too. Although, it isn’t just Hyundai/Kia that are doing this. Ford, Mercedes, Volvo and Toyota are either building new US battery plants or dramatically expanding their current US battery plants. As such, their vehicles are set to get way cheaper in the US as well.
In short, the competition is now better than Tesla in many ways while costing the same, but they are on a trajectory to cost less in the coming years.
So, why has this happened? Well, Tesla hasn’t developed enough to stay ahead of the competition. The 4680 battery was meant to make Tesla cars significantly cheaper and possibly even enable 800V architecture that enables the lightning-fast charging seen in the IONIQ 6. However, Tesla has failed to get the battery to meet its initial specifications or cost and has stubbornly steered clear of 800V architecture. Tesla has also failed to introduce a wider range of models, as many of its rivals have, such as Kia with its e-Niro, Soul, EV6 and EV9, as well as the upcoming EV3, EV2, and EV4. After all, you can’t dominate a market as varied as the automotive sector with only a few specific models.
It’s also unlikely that Tesla will make any significant developments in the near future either, as Musk has disbanded teams and cut funding for development projects, battery development, gigacasting development and supercharger development, all in the name of developing Tesla’s AI. As such, it seems Tesla is set to stay still while its competitors take its spot on top. This future is far from set in stone, but the recent sales statistics and market moves heavily imply Tesla’s days as the EV king are numbered.
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Sources: Cox Auto, EV Database, EV Database, Car And Driver, Elektrek, Will Lockett, Will Lockett, Will LockettÂ