Tesla’s US EV Market Share Falls Below 50%

For the first time, electric vehicle (EV) market leader Tesla (NASDAQ:TSLA) has seen its market grip in the United States slip below the halfway mark. In a significant change in market dynamics, Tesla's share has dropped to 49.7% in the second quarter, down from 59.3% a year earlier.

This shift indicates increasing competition as legacy automakers like General Motors (NYSE:GM) and Ford (NYSE:F) ramp up their efforts in the EV space and chip away at Tesla's dominant position.

Sales of electric vehicles in the U.S. have shown resilient growth, increasing by 11.3% year-over-year. Despite the general upward trend in electric vehicle adoption, Tesla's U.S. sales have experienced a downturn. The company reported selling 164,000 vehicles in the second quarter, marking a 6.3% decrease from the same period last year.

Globally, Tesla delivered 443,956 vehicles in Q2, but this figure also represents a drop, specifically of 4.8% compared to last year's global deliveries in the same quarter. This indicates that Tesla's challenges are not limited to the U.S. market but are part of a broader global trend.

In Europe and China, Tesla holds market shares of approximately 20% and 10%, respectively. Recently, customers in Europe saw an increase in prices for the Model 3 cars by around €1,500 ($1,622), due in part to EU tariffs on EVs that are manufactured in China. Such cost adjustments can potentially impact demand and ultimately market share.

Despite the recent market share dip, some analysts remain bullish on Tesla's future. Notably, Morgan Stanley's Adam Jonas reiterated a Buy rating on Tesla stock with a price target of $310, suggesting a 14.6% upside potential from current levels. Jonas expressed optimism about Tesla's energy division, forecasting that it will reach 100GWh in storage deployments by 2028 and raising the valuation of this Tesla's business segment.