Tesla, the current titan of the EV industry, might find its dominion challenged as competitors emerge, making way for Detroit’s renowned Big Three automakers to take center stage in the US EV market.
The Bank of America’s annual “Car Wars” report underscores that the upcoming four to five years are poised to be a period of high volatility and uncertainty for all automakers. This uncertainty stems from the frequent recalibrations and last-minute strategy shifts triggered by the rapid evolution of electrification.
“ICE dominance is over,” states the report. From 2023 to 2027, it’s projected that 46% of newly launched vehicle models will be electric, dwarfing the 35% for internal combustion engines and 18% for hybrids. Dramatic shifts in sales are also foreseen. In the first quarter of this year, pure electric vehicles comprised 7% of new car sales in the US, mirroring global trends. This growth trajectory is set to quicken, with EVs projected to seize 26% of the new car market by 2026.
Notably, analysts at US Bank envision a slow erosion of Tesla’ market share, sliding from its zenith of 78% in 2018 to a still formidable 18% in 2026. As the report suggests, “Telsa will still be the leader in EV market share,” but the lion’s share of the EV market will be partitioned among the traditional automakers—the Big Three: Ford, General Motors, and Stellantis.
As per their estimations, both Ford and GM are slated to attain a 14% market share of EVs by 2026, with Stellantis holding an 8% share. Collectively, Detroit’s Big Three will command 31% of the EV market, perpetuating their illustrious automotive legacy.
In a bold resurgence, General Motors, which sold over 20,000 pure electric vehicles in Q1 of this year, is poised to roll out popular US models such as the Chevy Blazer, Equinox, and Silverado EV. Remarkably, by 2025, General Motors aims to achieve a production capacity of one million EVs, bolstering their revival.
Stellantis, too, is bracing for competition, introducing pure electric models from Jeep and RAM. Concurrently, Ford is planning to launch the eagerly awaited F-150 Lightning, the Explorer, and other mainstream models. Within a few short years, the market will be brimming with a diverse array of EV options that consumers might find themselves asking, “Does this come with a gasoline option?”
Nonetheless, this report appears to hinge on the Big Three automakers flawlessly delivering on their ambitious production and sales targets, while assuming emerging EV startups like Lucid and Rivian will grapple with production challenges. This viewpoint, while not without merit, seems somewhat paradoxical.
In fact, should all projected production capacities be realized, Tesla’s market share could potentially climb even higher. Ignoring the much-anticipated Cybertruck, which has millions of pre-orders and is set to commence deliveries this year, Tesla’s forthcoming affordable models are projected to exceed an annual production scale of one million units. Given Tesla’s super factory expansions, the firm could potentially exceed a 20% market share in the US by 2026.
Regardless, Tesla has already achieved half of its founding mission—make EVs mainstream. With an increasing number of automakers entering the fray, the primary hurdles now lie with battery capacity and cost reduction. In this swiftly expanding market, the title of sales champion will go to whoever manages to secure a leading position in battery costs and production volume.
(Image Source: General Motor)
