Tesla's Share of US EV Market Dips Below 50 Percent for First Time

Tesla’s (NASDAQ:TSLA) share of the US electric vehicle (EV) market fell below the 50 percent threshold for the first time ever in 2024's second quarter, according to a July 11 report from Cox Automotive.

The company’s dominant position in the American EV market, which it has held since the introduction of its Model S in 2012, took a hit on the back of competition from rival automakers, including EV manufacturers in China.

Tesla accounted for 49.7 percent of EV sales in the US from April to June, down from 59.3 percent a year earlier. The decline came despite growth in overall US EV sales, which rose 11.3 percent compared to the same period last year.

The total number of electric cars and light trucks sold in the US exceeded 330,000 units during the second quarter, representing 8 percent of all new car sales in the period, up from 7.2 percent a year earlier.

The drop in Tesla’s market share can be attributed to several factors. One is that traditional automakers like Ford (NYSE:F), Hyundai (KRX:005380) and Kia (KRX:000270) have been aggressively expanding their EV offerings.

Just last month, Hyundai and Kia entered into a long-term agreement with Chilean chemicals company SQM (NYSE:SQM) to acquire their supply of lithium hydroxide, a necessary component for EV batteries.

At the same time, Tesla’s EV lineup has aged, with the best-selling Model Y debuting in 2020.

In contrast, competitors are introducing newer models with updated technology and designs. Hyundai and Kia, for example, offer a broader range of EVs at competitive prices, with the former finding commercial success for its IONIQ 5 release, while the IONIQ 6 is one of the 10 most fuel-efficient EVs in the US this year.

Tesla’s global sales were down in Q2 as well. The company reported a 4.8 percent drop in sales worldwide for the quarter, with approximately 444,000 units sold. Cox estimates its US sales fell by 6.3 percent to 164,000 cars.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.