FYI: Tesla’s U.S. Market Share Dips Below 50% as Rivals Gain Ground
Maybe you’ve been driving a Tesla for years. Perhaps it was your first electric vehicle, and now you’re curious about what else is available. Maybe newer options are enticing you with better prices, more range, and unique features. Or, the publicity surrounding Tesla’s CEO has you reconsidering your choice. If so, you’re not alone.
While Tesla is still the dominant player in the EV market both in the U.S. and globally (depending on BYD’s performance each quarter), its market share in the U.S. has recently dipped below 50% for the first time. In some ways, this decline is inevitable. Tesla played a pioneering role in the EV movement, but now there are numerous alternatives that meet or exceed the capabilities of the Model 3 and Model Y.
Tesla’s Evolving Market Presence
In the second quarter of 2024, Tesla’s U.S. EV share fell below 50%. While it remains America’s biggest EV brand, its aging lineup and CEO Elon Musk’s focus on robotaxis and AI are causing buyers to look elsewhere.
So, where are these former Tesla owners going? It’s a complex scenario.
Understanding Post-Tesla Trade-Ins
Edmunds recently evaluated data concerning Tesla trade-ins and noted an intriguing trend: "More than half of Teslas are being traded in for gas cars." While true, there are important factors to consider.
Firstly, this data derives from traditional dealerships and excludes trade-ins for newer Teslas or other direct-sale brands like Rivian, Lucid, and Polestar. Tesla-to-Tesla trades also don’t figure into these numbers. Furthermore, while half of all dealership trade-ins put people back into gas-powered cars, this number has significantly decreased from 71% in 2019, suggesting a shift in consumer behavior.
Changing Consumer Preferences
Back in 2019, trading in a Tesla often meant returning to a gas-powered car. Today, that’s no longer the dominant narrative. Most studies indicate that EV owners tend to stay within the electric ecosystem long-term, even if they add a second or third gas or hybrid car to their fleet.
What New EVs Are Tesla Owners Choosing?
Edmunds data reveals that new EV models gaining popularity among former Tesla owners include:
- Ford F-150 Lightning
- Cadillac Lyriq
- Kia EV9
- Chevy Silverado 1500
- BMW i4
These preferences suggest that while EVs are not the majority of trade-ins, EV nameplates are still the top choices among former Tesla owners. Interestingly, traditional trucks like the Chevy Silverado, Ford F-150, and Toyota Tundra are the most popular gas-powered options, indicating a shift in lifestyle or priorities.
Looking Beyond Tesla
This dealership data does not account for sales from Rivian, Lucid, or Polestar—and definitely doesn’t cover anyone who ended up with a Fisker. Additionally, hybrids are likely underrepresented in these figures. Hybrid choices for models like the F-150, CR-V, and Tundra weren’t separately tallied, suggesting strong hybrid sales too.
Moreover, there’s still significant brand loyalty within Tesla’s customer base. Tesla boasts an 87% brand retention rate, outperforming brands like Lexus (67%) and Toyota (54%). Additionally, 81% of prospective Tesla buyers are first-time customers switching from other EV brands, which dwarfs Nissan’s 42%.
Final Thoughts
Don’t count Tesla out yet; the brand still commands a loyal following. However, an injection of new models could bolster its appeal in an increasingly competitive market.
For more insights and updates, reach out to us at tips@automotive.fyi, or on Twitter @automotivefyi.
William Kouch, Editor of Automotive.fyi
