Ford’s decision to halt plans for a $3.5 billion EV battery plant in Michigan highlights the mounting challenges for Tesla’s rivals in the US market. Tesla is leveraging its sales dominance to corner rivals into unprofitable, low-volume niches.
According to S&P Global Mobility data, Tesla outsold its next 19 competitors by at least 10-to-1 each during the first half of 2023.
EV Sales in US Surge by 50% YoY in First Half 2023, But Slowed From Torrid Pace
Elon Must just retweet on the X platform says: “The competition is coming”.
Tesla moved 325,291 vehicles in the US from January to June. GM’s Chevrolet Bolt EV was a distant second at just 34,943 units, followed by Ford, Hyundai and Rivian.
On a model basis, Tesla occupied four of the top five best-selling spots, led by the Model Y and Model 3 at 200,000 and 160,000 units respectively so far this year.
Tesla’s surging volumes allow it to realize efficiencies and costs that competitors can’t match with their fledgling EV entries cobbling together market share crumbs.
Profitable scale enables Tesla to plow investments back into its vertically integrated manufacturing and technology. This results in a self-reinforcing cycle further cementing Tesla’s lead.
Rivals without such sales volumes are forced to target niche segments, sacrifice margins, or risk losing money on EVs – as Ford conceded by halting battery plant construction meant for future electric F-150 Lightning.
Tesla’s increasing US dominance, led by the wildly popular Model Y and Model 3, has rapidly flipped the EV competitive landscape. Established automakers finds themselves trailing far behind while scrambling to carve out piecemeal shares in various segments.
As Tesla continues expanding output from its Austin and Berlin factories globally, Elon Musk shows no signs of ceding ground in the booming EV sales race. Tesla’s rivals face challenging decisions on how much money to pour into an EV future with less upside potential.
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