Loup Ventures seems confident that Tesla’s (NASDAQ: TSLA) US marketshare will not diminish once new competition enters from OEMs.
“Based on the currently available EV models in the US market, along with the models expected to be released next year, we believe Tesla will exit 2021 with a 70-80% market share. If we’re correct, Tesla’s economies of scale will strengthen, making it more difficult for traditional automakers to benefit from the long-term secular shift to electric,” wrote Loup Ventures' Gene Munster and Christine Pastor.
So far, Tesla has been met with little to no competition in the EV segment. There were predictions that legacy automakers would eat-up some of Tesla’s marketshare once they released their new energy vehicles.
Tesla (TSLA) Q1 2020 Results Has Gene Munster's Confidence, EV Maker Will Thrive After Pandemic https://t.co/QvyDpj3xZS pic.twitter.com/JCDw64b2Qz
— Tesmanian.com (@Tesmanian_com) April 23, 2020
However, OEMs don’t seem to be in a rush to release battery electric vehicles (BEVs) yet, not at a larger scale. Traditional carmakers are still more focused on manufacturing ICE vehicles.
Based on Loup Ventures' analysis, there are a total of 16 EVs available for purchase in the US, and there could be 28 by the end of the year. However, the majority of the EVs being released may not be viable mainstream options.
“The majority of these new models suffer from one of two critical flaws: starting prices above $70,000 and/or ranges below 225 miles. These two flaws rule out most EVs as mainstream options. In our view, mainstream options are priced below $40,000 with a range above 225 miles,” said the analysts from Loupe Ventures.
Since Elon Musk took the helm at Tesla, the company has worked hard to make EVs more affordable and accessible to people. The Tesla Model 3 and Model Y are the current viable mainstream options the company offers. And the EV automaker is still discovering ways to make all its vehicles more affordable, as evidenced by the recent price decrease of the Model S, Model 3, and Model X.
Tesla (TSLA) Has 60% Chance Of Being In the S&P 500 By The End Of 2020, Says Gene Munster https://t.co/M4HBJ9ZNPr pic.twitter.com/qj1Le37ug8
— Tesmanian.com (@Tesmanian_com) May 1, 2020
Loup Ventures also cites Tesla’s “8-year head start” on EV production as a factor in the company maintaining its US marketshare. There are three key benefits Tesla has gained with its head start, which are its advanced battery efficiency, growing Supercharger network, and improving Self-Driving software.
As of this writing, TSLA is the most valuable auto company in the world, surpassing Toyota, with a market cap of US$185 billion. Tesla accomplishing such a feat would have been deemed impossible by the vast majority of people a decade ago or even a year ago. Yet, here it stands.
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This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Ma. Claribelle Deveza, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.
About the Author
Ma. Claribelle Deveza
Longtime writer and news/book editor. Writing about Tesla allows me to contribute something good to the world, while doing something I love.
