Summary
- Tesla’s market share in the US is decreasing, falling below 50% in the second quarter of 2024
- Despite half of Tesla trade-ins at dealerships going toward gas cars, the number has significantly decreased compared to 2019
- Most EV owners tend to stick with EVs long-term, but may add gas or hybrid cars to their garage
- The Ford F-150 Lightning, Cadillac Lyriq, and Kia EV9 are popular choices for former Tesla owners
- Tesla still has an 87% brand retention rate and attracts new customers switching from other EV brands
Article
Tesla’s market share in the U.S. is declining as the electric vehicle market expands with new options that offer better prices, more range, and different features. In the second quarter of 2024, Tesla’s U.S. EV share fell below 50% for the first time, marking a shift in the industry. While Tesla remains the biggest EV leader in America, its aging lineup of cars and CEO Elon Musk’s focus on robotaxis and AI have led buyers to explore other options. This trend reflects the inevitable outcome of Tesla’s pioneering role in the field of electric vehicles and the emergence of new competitors that meet or exceed the capabilities of Tesla’s models like the Model 3 and Model Y.
Recent data from traditional dealerships indicates that more than half of Teslas are being traded in for gas-powered cars. However, this number is down significantly from 2019, when 71% of Tesla owners trading in their vehicles opted for gas-powered cars. The data also does not account for trade-ins for newer Teslas or other direct-sale startups like Rivian, Lucid, and Polestar. EV owners tend to stay with EVs in the long term, even if they add a gas or hybrid car to their garage. The availability of more EV options and publicly accessible chargers has also contributed to keeping people in the electric ecosystem. Popular trade-in models for former Tesla owners include the Ford F-150 Lightning, Cadillac Lyriq, and Kia EV9, showcasing a diverse range of options in the market.
While EVs do not make up the majority of the trade-ins, EV nameplates remain the most popular single models for former Tesla owners. Notably, there is no single gas model that stands out as attracting Tesla owners. Traditional trucks like the Chevy Silverado, Ford F-150, and Toyota Tundra are among the most popular gas cars for former Tesla owners, indicating a lifestyle change or shift in priorities that may not align with what Tesla offers. However, the data from dealership trade-ins does not account for sales of Rivian, Lucid, or Polestar vehicles, hybrids that people may be trading in for, or the number of customers staying loyal to Tesla.
Despite the decline in market share and increasing competition, Tesla maintains an 87% brand retention rate, outperforming non-electric automakers like Lexus and Toyota. Prospective Tesla buyers are also more likely to switch from competing EV brands, highlighting the brand’s continued appeal and influence in the market. However, the need for new models in Tesla’s lineup is apparent, as the company faces challenges from newer and more diverse options in the EV market. The evolving landscape of electric vehicles presents both opportunities and challenges for Tesla as it navigates the changing preferences of consumers and the expanding competition in the industry.
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