Tesla's Share of US Electric Vehicle Market Slipped to a New Low in Q3

Competitors including EV startups and legacy automakers have taken market share from Tesla

By
Mack Wilowski
Mack Wilowski
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Mack Wilowski is a staff writer for Investopedia, focusing on breaking news stories, earnings previews, and company-specific insights and analysis. Previously, he was an associate editor for Investopedia's earned media team, where he covered the New York City Recovery Index and Economy Tracker, the weekly "What to Expect" markets preview, The Investopedia Express and Green Investor podcast transcripts, and the Term of the Day newsletter.
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Published October 13, 2023
Tesla Model Y

Brandon Bell / Staff / Getty Images

Key Takeaways

  • Tesla's share of the U.S. electric vehicle market fell to 50% in the third quarter, down from nearly 65% for the full year in 2022.
  • Tesla, which has cut prices on popular models, saw its vehicle sales rise almost 20% in Q3, but it wasn't enough to sustain market share as competition grew.
  • New competitors, including both EV startups and traditional automakers such as Hyundai, BMW and Mercedes that have released their own electric models, have gained at Tesla's expense.
  • A record 313,000 battery electric vehicles were sold in the U.S. in the third quarter, and full-year sales are likely to surpass 1 million for the first time ever.

Tesla's (TSLA) dominance of the U.S. electric vehicle market continues to slip as new competitors, including both EV startups and legacy automakers, gain market share.

Cox Automotive's Electric Vehicle Sales Report for the third quarter, released Thursday, said that Tesla's market share fell to 50%, the lowest on record. Tesla's share of the fast-growing EV market is down from almost 65% in the same quarter last year.

Tesla has cut prices on popular models in an effort to entice more shoppers, which helped the company achieve a 19.5% increase in vehicle sales in the third quarter compared with a year earlier. But those kinds of sales gains aren't enough for Tesla to sustain market share in an increasingly competitive and fast-growing EV market.

Overall U.S. sales of battery electric vehicles hit a record 313,000 in the third quarter, up 50% from the year-ago period. Cox Automotive expects that full-year EV sales will hit 1 million for the first time in 2023, a landmark that will likely be achieved in November.

New competitors, including both EV startups and traditional automakers like Hyundai, BMW and Mercedes that have released their own electric models, have gained at Tesla's expense.

Nascent EV maker Rivian Automotive's (RIVN) market share increased to 5% in the third quarter after sales more than doubled from a year ago. Rivian was the fifth-biggest EV seller in the U.S. by market share in the third quarter, behind Tesla, Ford (F), Hyundai and Chevrolet.

Gains were even more impressive for some legacy carmakers that have entered the EV market. Hyundai's EV sales in the U.S. more than tripled in the third quarter, giving the South Korean automaker a 6.3% share of the market. BMW's (BMWYY) market share rose to 4.2% after its EV sales tripled in the third quarter from a year earlier, while Mercedes' (MBGYY) market share hit 3.3% as sales nearly quadrupled.

Electric vehicle sales represented 7.9% of total U.S. auto industry sales in the third quarter, versus 6.1% a year earlier. With new competitors entering the market and EV models proliferating, the number of EV products available to consumers will double by 2027, Cox Automotive said in the report.

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  1. Cox Automotive. "Another Quarter, Another Record: EV Sales in the U.S. Surpass 300,000 in Q3, as Tesla Share of EV Segment Tumbles to 50%."

  2. Cox Automotive. "Electric Vehicle Sales Report — Q3 2023."

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