With all the carmakers flocking to the electric vehicle (EV) space globally, can Tesla maintain its market dominance in the medium-to-long term?
With even luxury brands like Mercedes-Benz, Audi, Jaguar and Land Rover as well as BMW gearing up to enter the electric car segment, there will not be any dearth of top-quality e-cars.
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| Tesla Model S can travel the longest distance among all EVs globally. |
So, the pricing game will come into play. And, not to forget, the performance, features as well as the technology will also be key factors for choosing an EV.
Another big factor would be the quality of the battery and the distance travelled on a single charge.
So, who are the biggest threats to Tesla? It’s not BMW, Merc or Audi for that matter but the likes of Toyota Motor Corp, Volkswagen AG (VW) and General Motors (GM).
Toyota and VW are the world’s biggest automakers and sold around 10 cars for every one car sold by Elon Musk’s Tesla.
“When the two biggest carmakers of the world plan to go all-out on electric cars, then there’s no question of any speculation — the mainstream is surely going electric,” said a former car firm top executive and an expert in EVs.
He expects the shift to electric cars to be much faster than the targets set by most countries.
VW has set aside a mega budget for electrification. It will be spending $100 billion on EVs and software development over the next five years.
VW’s initial entry into the EV space was with luxury cars like the Audi e-tron and Porsche Taycan.
Last year, it sought a big entry with more mainstream offerings like the ID.3 hatchback and ID.4 SUV.
VW has publicly stated that it intends to overtake Tesla in the near future.
On the other hand, GM hopes to lead the EV market by 2025 with 2 million cars on the road. Also, Ford thinks it will bag pole position in the market by 2026 and leave Tesla behind.
But here is why Tesla still has a competitive advantage over other electric carmakers. But whether it can continue its dominance in the electric vehicle space in a few years from now is to be seen.
Some notable factors on Tesla’s competitive advantage:
First-mover advantage: Tesla has been in the EV market much longer than its competitors. The name Tesla is still considered religion in the e-car space and this will be difficult to erase even in the medium term, at least.
Battery power: The main reason why Tesla sells almost three out of four electric vehicles in the US for the last couple of years is because its cars can travel a greater distance on a single charge. This is unmatched up to now.
For instance, Tesla’s Model S can travel up to 660 km (410 miles) on a single charge, though it varies according to the variant. This is the highest among all EVs globally.
The nearest rival of the Model S in distance travelled is not a luxury brand, that is, the Ford Mustang. This is followed by Tesla Model 3 and Tesla Model X.
Infrastructure: Since Tesla has been into EVs for long, it boasts of an infrastructure like no other car giant.
Conclusion
It seems considering its competitive advantage, Tesla could maintain its dominance in the EV space, at least in the medium term.
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