Tesla continues to maintain a significant lead in the U.S. electric vehicle (EV) market, forcing competitors into low-volume, unprofitable niches, according to a Reuters analysis of U.S. EV sales data for the first half of 2023.
The report comes as Ford Motor pauses its planned $3.5 billion battery plant in Michigan, raising questions about the viability of new battery and assembly operations in the rapidly evolving market.
Tesla sold 325,291 vehicles in the U.S. from January to June 2023, far outpacing its closest competitor, General Motors’ Chevrolet brand, which sold 34,943 units of its aging Bolt EV. Ford, Hyundai, and Rivian trailed behind.
Tesla’s Model Y and Model 3 led the sales charts with 200,000 and 160,000 units sold, respectively. In contrast, Chevrolet’s Bolt sold 35,000 units, and Ford’s Mustang Mach E sold 13,600 units—figures insufficient to sustain a full-scale assembly plant, which typically needs to operate at 80% capacity or more to be profitable.
The chart below from Reuters illustrates the huge lead Tesla has in the U.S. for EV sales so far in 2023:
Data compiled by the Alliance for Automotive Innovation showed that EVs, including plug-in hybrids and fuel cell vehicles, accounted for 8.9% of the U.S. market in the first half of 2023, up from 6.3% a year earlier. However, this market share was fragmented among 103 different models, according to the Alliance’s latest quarterly report.
Ford’s decision to halt its Michigan battery plant project comes amid a forecasted full-year loss of $4.5 billion on its EV unit, 50% higher than earlier projections. The automaker has also slowed down its EV production ramp-up. Despite the influx of new entrants, Tesla still commands nearly two-thirds of all U.S. EV sales, according to Cox Automotive. No other brand holds more than a 10% market share.
Cox Automotive also noted that average EV retail prices have dropped to $53,376 in July 2023, down from nearly $70,000 a year ago, largely due to Tesla leveraging its superior profit margins to reduce prices and boost sales.