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Musk’s Tesla dominates EV gross sales however that may very well be coming to an finish based on report from S&P

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Elon Musk’s Tesla dominates the electrical car house within the U.S. However that dominance may very well be set to weaken within the years forward.

Based on new analysis from S&P International Mobility, extra carmakers will pile into the house with lower-priced options—particularly with fashions costing lower than $50,000, “the place Tesla doesn’t but actually compete,” the agency wrote this week. 

“Tesla’s place is altering as new, extra inexpensive choices arrive, providing equal or higher know-how and manufacturing construct,” S&P wrote. “On condition that shopper alternative and shopper curiosity in EVs are rising, Tesla’s capacity to retain a dominant market share shall be challenged going ahead.”

S&P predicts that Tesla’s EV market share will fall beneath 20% by 2025, down from 79% in 2020, 71% final 12 months, and 65% this 12 months (via the third quarter). By the tip of 2025, it added, the variety of EV fashions offered by totally different corporations can have grown to 159, up from 48 right this moment. That can imply way more choices for shoppers, and fewer of a market share for Tesla. 

“Earlier than you’re feeling too badly for Tesla, nevertheless, keep in mind that the model will proceed to see unit gross sales develop, at the same time as share declines,” mentioned Stephanie Brinley, affiliate director of AutoIntelligence for S&P International Mobility, in an announcement. “The EV market in 2022 is a Tesla market, and it’ll proceed to be, as long as its rivals are sure by manufacturing capability.”

However the analysis agency added that “manufacturing capability is being addressed, as automakers, battery producers and suppliers pour billions into that aspect of the equation.”

For instance, Volkswagen’s new ID.4 meeting line in Tennessee has 20,000 unfilled reservations and a capability of seven,000 models monthly, S&P famous, and that alone “ought to change the EV quantity image considerably.” 

Tesla didn’t instantly reply to Fortune’s request for remark. 

In Tesla’s third-quarter earnings name, Musk mentioned Tesla was engaged on a extra inexpensive new mannequin, having accomplished “the engineering for Cybertruck and for Semi.”

“We don’t wish to discuss precise dates,” he added, “however that is the first focus of our new car improvement workforce.”

“Tesla has opened two new meeting vegetation in 2022 and is searching for the positioning of its subsequent North American plant,” S&P famous. “Tesla right this moment is the model finest geared up for benefiting from the rapid surge in EV demand, although manufacturing investments from different automakers will erode this benefit prior to later.”

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