Elon Musk often switches places with LVMH mogul Bernard Arnault for the title of world’s richest person, with virtually every tweet, podcast episode, and Cybertruck announcement influencing how Tesla’s stock trades on a daily basis.
However, if there is one factor that will influence a company’s valuation, it is Tesla’s share of the worldwide EV market. According to Counterpoint Research, it has a gigantic 62% share in the US in the first quarter of this year, and it will beat China’s BYD Auto to a 20% global market share in the second quarter of 2023.
Despite this, industry insiders believe Tesla’s overall EV market dominance in the US has decreased from 79.4 percent in 2020 to 65.4 percent at the end of 2022, with the most recent count pegged at around 56.5 percent, according to Business Insider. In terms of market share, that’s sinking like a stone.
This is changing, and the newly heightened competition will only benefit consumers, whether they are Tesla enthusiasts, preferring to stick with tried-and-true manufacturers, or looking to Asian markets for answers.
The Chinese threat
NIO, Xpeng, Zeekr, and Wuling are all names that Westerners are likely only now becoming aware of, but all pose a significant threat to Tesla’s market dominance.
However, it is the Warren Buffet-backed BYD that is already giving Musk fits, with its Atto 3 proving to be the best-selling EV in Sweden in July, according to Electrek, and the company’s numerous other reasonably affordable models gaining attention all around the world. It’s now a monthly duel between Tesla and BYD for the top rank among global EV sellers.
Furthermore, the auto industry’s dependence on China means that it is no longer the nation that will supply “cheap and cheerful” vehicles of questionable build quality, but rather actual competitors to the long-standing automotive system.
The simple fact is that Tesla has been caught sleeping almost as badly as the previously listed BMW, Mercedes-Benz, Ford, and a slew of other automotive titans.
Indeed, Autocar and other respected motoring publications have given positive early assessments of vehicles such as Nio’s luxury ET5. In fact, Autocar gave it 4/5 stars, stating that it is “appealing to look at and drive.” This newcomer is already a strong competitor to the BMW i4 and Tesla Model 3.” Similar tales can be told about BYD’s Seal and Dolphin, both of which provide excellent value for money.
This growing competition from the East will only compel Tesla to respond, whether it’s with new models (beyond the Cybertruck), updated technology, or even lower prices. All of this is on the table.
EVs will become more affordable.
In the EV sector, attention is focused on developing more affordable EV solutions that, due to a lack of compromise on electric range and build quality, will finally see the people switch to electrification.
Renault has revealed that the Twingo moniker will be revived for a 2026 debut, where it will be one of Europe’s cheapest EVs at ₹18,24,509.71 . Kia plans to sell the upcoming small and highly awaited EV 2 for less than $30,000 / ₹22,80,637.14 / AUS$45,000 in the same year, whereas Jeep’s recently unveiled electric Avenger will cost a little more than £35,000 / €39,000. Unfortunately, Jeep believes it is too small for the US market.
However, much of this is dependent on the cost of batteries and the raw materials necessary to manufacture them. According to some analysts, such as Benchmark Mineral Intelligence analyst Evan Hartley, these prices have been dropping in recent months, to the point where “decreasing cell prices could allow [manufacturers] to sell mass market electric vehicles at comparable prices to internal combustion engine vehicles, with the same margin, improving the attractiveness of the EV transition for both consumers and automakers.”
Tesla will upgrade its charging infrastructure.
Because of the mounting pressure on Tesla’s overall EV sales, the company has cleverly expanded into other significant electric car markets. To begin, it has begun selling Supercharger technology to EV charging providers.
Offering these white-labeled, ready-to-go fast charging systems has already resulted in deals worth hundreds of millions of dollars from companies such as BP and the EG Group, both of whom want to deploy hundreds of Supercharger stations across the UK, Europe, and North America. This is music to the ears of electric vehicle owners.
The Tesla Supercharger network is far from flawless, but it is more consistent than competing solutions from other start-ups, and it is frequently the best maintained and easiest to use. Furthermore, there are simply more of them, as Tesla has been busy creating Supercharger stations long before the widespread use of EVs.
Because Tesla is selling its technology as a “plug and play” option, additional energy providers, shopping mall owners, car parks, and even hotel chains may be persuaded to buy in mass.
Public charging stations with solar and battery storage capabilities are just the tip of the iceberg, and they could help iron out some of the network’s flaws.
Insurance costs are being reduced
Aside from complaints about the public charging network and average wait times, one of the most contentious issues among today’s EV owners is the thorny subject of insurance.
The main line is that EVs are costly to insure. Today’s purchase price is high, damaged batteries are expensive to repair (since few people know how), and electric motor performance is intrinsically fast.
Tesla is able to provide premiums based on how individual drivers behave on the road since its cars collect unfathomable amounts of data throughout every drive. “We use existing technology in our vehicles to track your real-time driving behavior, no additional hardware required,” according to the statement.
The more data Tesla collects on its drivers, the more likely it will be to lower premiums for its owners. According to ValuePenguin, a US insurance and credit card specialist, Tesla’s insurance premiums are up to 49% lower than the top insurers, depending on the state.
Tesla’s product is far from ideal, with some early customers complaining about poor customer service, lengthy repair wait times, and delayed reimbursements following accidents. Regardless, it has the potential to catch on with other EV manufacturers, especially because most modern vehicles already have the necessary sensors and connectivity to supply the massive amounts of data required.
