Tesla is expected to lose significant electric vehicle market share to Ford, General Motors and Stellantis over the next four years, according to Bank Of America’s (BofA) recent Car Wars report.
Even though the legacy automakers are expected to gain, the industry might continue to be unpredictable, as per the study. “The next four-plus years could be some of the most uncertain and volatile for product strategy ever,” states the report.
The BofA forecast states that “ICE dominance is over,” with EVs projected to account for a bigger slice of new model launches from 2024 to 2027. During that period, 46 percent of new launches would be EVs, 35 percent are likely to be ICE and 18 percent would be hybrids.
EVs outperformed their ICE counterparts in terms of sales growth rate in the first quarter of 2023. Total BEV registrations reached 257,507 in Q1 2023, up by 63 percent year-over-year, accounting for 7.0 percent of the total market share, up from 4.6 percent in Q1 2022.
The projected EV market share in 2026 will be almost a quarter of the total US auto sales, as per the Car Wars report. Thanks to the Inflation Reduction Act, and lowering battery and component costs, EVs are set to become more affordable in the US. The result of incentives and reducing costs could increase the US EV market share to 26 percent by 2026, states the report.
Tesla’s market share might fall as its competitors bring in newer products across segments. The report estimates Tesla’s slice of the pie to fall from its peak of 78 percent in 2018 to about 18 percent by the end of 2026. Ford and GM’s share would grow to 14 percent each, while Stellantis is expected to account for 8 percent of total sales.
According to an analyst, Tesla may face challenging business conditions in the future as it has not launched an all-new model in a long time. Meanwhile, Ford and GM are set to launch multiple models in the near future.
GM CEO Mary Barra recently said that the company was on track to build 400,000 EVs by the middle of 2024 and a million units by 2025. The Chevrolet Blazer EV and Equinox EV rolled off GM’s assembly lines in Mexico in June 2023, and are expected to drive volumes for the brand. Meanwhile, Ford is reportedly working on its second-generation EVs, including the successor of the F-150 Lightning electric truck.
That said, the Elon Musk-led company's current sales record run is barely a precursor to the aforementioned market forecast. The brand set a new record for quarterly production in Q2 2023 and is expected to manufacture and deliver close to 2 million EVs this year.