Report: Record high U.S. electric vehicle sales lead to Tesla's market share decline

The United States saw a drastic rise in the sale of electronic vehicles (EVs), with more than 300,000 units sold for the first time in the third quarter. However, leading EV manufacturers like Elon Musk’s Tesla saw their market share drop to the lowest ever recorded.

Tesla had a market share of 62% in the first quarter. This number had dropped to 50% by the third quarter. This drastic drop has occurred despite the price war started by Tesla to maintain a strong hold on the EV market.

However, Tesla can recover from this drop with the launch of their electric pickup truck, Cybertruck. This is set to start deliveries to its customers in the current quarter.

Tesla’s competitors have been using an aggressive approach by cutting prices to compete in tough market conditions, which are influenced by high inflation and rising borrowing costs.

Some vital factors, such as greater inventory levels, increased product availability, and downward pricing pressure, have contributed heavily to maintaining a linear growth of EV sales in the U.S. market.

Due to the price war started by Tesla, average EV prices came down to $50,683 in September. In August, the average price of an EV vehicle was $52,212.

Whereas, the total EV shares for the third quarter rose by 50% from the previous year. The sales accounted for a record 7.9% of total car industry sales in the United States.

Some of the EV companies have performed better than the analyst’s expectations, for example, Rivian Automotive. They have also restated their yearly goal of manufacturing 52,000 vehicles.

Unfortunately for Tesla, their deliveries were lower than market expectations in the third quarter. One of the reasons behind this was the planned upgrades made to their Model 3, which forced them to halt production.

Canalys, an industry analysis firm, reported earlier this month that although Tesla holds a strong position in the United States, there is a growing desire for a broader selection of electric vehicle (EV) choices to meet the expanding interest in EVs.