Tesla’s share of US electric car market falls below 50% in Q2 as Ford, Kia, BMW grow

As U.S. electric vehicle sales continue to grow, albeit at a slower-than-expected pace, Tesla’s market share has fallen below a key level as rivals’ improved EV offerings hit showrooms.

Cox Motor Company Latest Electric Vehicle Sales Report Market research firm Cox found that Tesla’s share of U.S. electric vehicle sales fell below 50% for the first time, to 49.7%. This comes as Cox estimates that overall electric vehicle sales grew to nearly 8% of the market, up from 7.2% in the second quarter of last year, in what it called a “record-breaking” quarter.

“Despite Tesla’s declining sales, with its share of EV sales now below 50% for the first time, the overall competitive landscape for EVs is heating up,” Stephanie Valdez Streeti, director of industry insights at Cox Automotive, said in the report.

Looking at the Cox dataset starting in 2019, Tesla’s market share peaked at 82.5% in Q3 2019 and has been steadily declining ever since. The steepest declines have occurred in recent quarters, starting in Q4 2021, when Tesla’s market share reached 77.5%. It has fallen to 50.2% in less than two years (Q2 2023) as new brands and EVs from legacy automakers enter the market.

Tesla’s market share decline coincides with a drop in second-quarter deliveries. Tesla said it delivered 443,956 vehicles in the second quarter, up from 386,810 vehicles delivered globally in the first quarter but down from roughly 466,140 vehicles delivered a year ago.

With Tesla now at 49.7 percent of the market, Cox found that the Ford Mustang Mach-E, Ford Lightning EV pickup and E-Transit cargo van put it in second place with 7.2 percent share. Kia, Hyundai and BMW rounded out the top five.

Digging deeper into the fastest-growing brands in the second quarter, GM’s Cadillac took top honors with more than 440% growth in EV sales, boosted by its LYRIQ midsize electric SUV. Although Cadillac’s LYRIQ was initially delayed as GM worked out issues with its Ultium EV platform, sales momentum has been building since the start of the year. Toyota saw sales of its only EV — the bZ4X — grow to more than 7,000 units in the second quarter (from 2,000 a year ago), albeit at deep discounts.

“This increased competition is putting continued pressure on pricing, which is gradually driving EV adoption,” said Valdez Streeti of Cox. “Automakers that offer the right product at the right price and provide an excellent consumer experience will lead the way in EV adoption.”

Rising affordability could be a sales boost for Ford, Kia and Hyundai. The moderately priced Kia EV6, the large EV9 SUV and the small Niro are reaching larger segments of the market, along with the similarly priced Hyundai Ioniq 5 and Ioniq 6 sedan.

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Luxury brands like BMW and Cadillac are likely to excel in customer service, Valdez-Street noted, as higher-income buyers value the dealer experience as well as product mix in their purchasing decisions. BMW’s electric vehicles, such as the BMW iX SUV, i4 Coupe and i7 full-size luxury sedan, have boosted sales.

By contrast, BMW’s rival Mercedes, which has been heavily into expensive luxury electric vehicles, saw its EV sales fall in the second quarter (down 22.3%) as its high-priced offerings fell flat with consumers. Mercedes has now reverted to gas-powered vehicles and no longer sees itself going fully electric by 2030.

Pras Subramanian is a Yahoo Finance reporter covering the auto industry. You can follow him on Twitter and on Instagram.

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