“My kids, when we get in the car, I say, ‘Hey, grandpa had a Mustang back then,'” said Romanowski, who paid around $70,000 for a top-of-the-line model. pretty cool that our family has that line.”
Buyers like Romanowski are helping new EV models reduce Tesla’s longstanding market dominance, just as Tesla founder Elon Musk devotes much of his attention to a series of crises in another of his companies – Twitter.
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Tesla still held the lion’s share, 65%, of new light-duty electric vehicle registrations in the United States in the first nine months of 2022, according to S&P Global. But that’s down from 79% in 2020, thanks to increased competition, including from some cheaper models, according to the data provider.
Ford takes second place, with about 7% of new electric vehicle registrations in the United States, followed by Kia at 5% and Chevrolet and Hyundai at 4%. Mercedes-Benz and others are rolling out electric vehicle models that challenge Tesla in the luxury market.
And there are signs that Musk could hasten Tesla’s downfall, as some former fans shun his cars due to his combative handling of Twitter and his embrace of certain right-wing memes and conspiracy theories.
Concerns over weakening demand for Tesla, particularly in China, the company’s second largest market, have contributed to a nearly 70% drop in the company’s share price over the past year. , which has left some investors screaming about what they perceive to be their lack-CEOs in action. Last month, Tesla offered price cuts in the United States to meet demand for fruit juices, and this month it cut prices in China for the second time as competition mounts there. But analysts say Musk needs to do more to stabilize the automaker.
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“Musk needs to take a more hands-on approach in 2023 in the business as Twitter’s distraction along with this current demand situation creates a perfect storm for the stock,” Wedbush Securities analysts wrote in a report last week. .
Tesla did not respond to a request for comment. musk recently tweeted that he “will ensure that Tesla shareholders benefit from Twitter in the long term”.
Tesla still has some advantages over its rivals. It has established a large electric vehicle production footprint, with four factories around the world, while many competitors are still building manufacturing capacity, according to Stephanie Brinley, automotive analyst at S&P Global Mobility. And Tesla still plans to launch models, including the sci-fi Cybertruck, the high-end Roadster and a model that Musk says will be cheaper than the company’s cheapest car today, the Model. 3.
Brinley said it was too early to make definitive predictions about EV winners and losers in a rapidly changing industry, with EVs expected to grow from 5% of the U.S. light-vehicle market last year to 17. % by 2025.
“As the competitors arrive, [Tesla] will lose his share. This does not mean that they will lose importance or volume. This does not necessarily mean that it will hurt their profitability. It’s just as more people come in, your slice of the pie goes down, especially in a growing and dynamic market like this,” Brinley said in an interview. Tesla is expected to sell about 800,000 vehicles in the United States in 2025, up from 502,000 in 2022, she said.
Still, the longtime darling of tech enthusiasts has lost some of its shine. Andrew James, an insurance industry executive in suburban Minneapolis, said some of Musk’s public behaviors, including his reinforcement of conspiracy theories, helped him turn away from Tesla. About a month ago, James bought a Mustang Mach-E instead, paying around $51,500.
“If you had asked me two years ago if my next vehicle would be a Tesla, I would have answered absolutely, 100%,” James said. “Elon kind of lost people, I think, with his recent antics. Not getting too political, but it got me exploring different options.
Several other recent EV buyers said they chose cars other than Tesla simply because there’s a lot more competition these days.
Joseph Law of Springfield, Virginia had owned a Tesla Model 3 for two years and loved it but wanted something bigger. After a test drive a few months ago, he spent around $54,000 on a Kia EV6. Her boyfriend also bought one.
“It came with a lot of standard features that you had to pay for with Tesla. It just seemed like the next logical choice, and it was bigger than the Model 3 I was driving,” Law said.
“Honestly, the Tesla was my dream car. … It was great to own it for the time I owned it. But I just wanted more,” he added.
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The Kia’s only downside, he said, is that it doesn’t qualify for a $7,500 federal tax credit because it’s made outside of North America. , in South Korea. The Mustang Mach-E, which is made in Mexico, is eligible for the tax break, as are electric models from Chevy and some US-made Tesla models that are priced below certain thresholds.
Steven Center, chief operating officer of Kia’s U.S. operations, said the lack of a U.S. tax credit could be a problem for the company’s smaller, cheaper electric vehicle, the Niro, as buyers of this market are more price sensitive. Kia has announced that it will start manufacturing electric vehicles in the United States in a few years. And despite not getting the current tax break, Kia’s EV business is booming, Center said.
“Customers buying the EV6 are new to the brand. These are high-conquest sales. They have the highest income of any customer we have dealt with. They are younger and better educated. Electric cars have been a huge change for Kia,” he said.
Justin Pace of Southlake, Texas, said he tested a Tesla Model 3 and a Mustang Mach-E about a year ago and preferred the Mustang. He said he bought one for himself “after reading a lot and liking the look of the body, the great reviews and the interior of the Mustang a lot more”. He then got a Mustang Mach-E for his wife, he said.
Darren Palmer, a senior EV executive at Ford, said the company has yet to aggressively advertise the Mach-E because demand still outstrips supply. This has resulted in long wait times for some buyers, which Ford is trying to reduce by increasing production to an annual target of 270,000 vehicles worldwide.
“We haven’t really marketed or pushed it,” Palmer said. “He’s sold out, so no need.”