Opinions expressed by Entrepreneur contributors are their own.
According to an S&P Global Mobility report, Tesla is still the dominant U.S. electric vehicle maker. That dominance, however, may not last for much longer as competing automakers undercut the company’s prices.
Through the third quarter of 2022, Tesla’s U.S. market share of newly registered electric vehicles was 65%, a drop from 71% in 2021. According to the S&P forecast, Tesla’s EV market share will fall to less than 20% by 2025 with as many as 159 EVs available, compared to a mere 48 today.
In a statement, S&P said, “Tesla’s position is changing as new, more affordable options arrive, offering equal or better technology and production build.”
“Given that consumer choice and consumer interest in EVs is growing,” the statement continued, “Tesla’s ability to retain a dominant market share will be challenged going forward.”
Fortune quoted S&P associate director Stephanie Brinley, who reportedly said that Tesla won’t actually lose sales regardless of its diminished market share. “The EV market in 2022 is a Tesla market,” Brinley said, “and it will continue to be so long as competitors are bound by production capacity.”
Even as consumer-friendly competitors like Ford and Chevrolet begin to crank up their EV assembly lines, Tesla will find itself up against luxury car competition with the likes of BMW and Mercedes-Benz in addition to direct rivals Lucid and Rivian.
S&P’s report noted that new EV buyers in 2022 tended to make the move to electric after owning gas-powered Hondas and Toyotas. Fortune reports that Brinley also added that Tesla vehicles comprised the largest share of registered electric vehicles.