It is interesting to view the massive hike Tesla created across the world as a sign of loyalty, attracting competitors, or as an admirer. Nobody can hide the fact that it has an impact and is the king of the EV market.
And most importantly, it knocked off the established ruling key players of the automotive world to 2nd position and became the No. 1 in the world. A very unconventional approach to transforming the way people commute around the world.
The several crucial aspects observed for Tesla to be the world leader in the electric vehicle market are:
- First mover advantage: Every company thirsts for that move and the opportunity to be a massive hit. In 2003, Tesla was established with a sole focus. EVs, or electric vehicles, are an alternative way to live sustainably in the world. Most of the automakers focused on EVs around 2010–2015, allowing Tesla to be perfect with technology, brand, and investments in strategic infrastructure.
- The Tesla Supercharge network is larger than any of its rival fast charging networks, with over 40,000 plugs worldwide as of 2022. Hence, Tesla supports long-distance travel for Tesla owners.
- A luxury, tech-driven, strong brand image that consumers want to be associated with due to its innovation and performance. As per experts, the legacy baggage of traditional automakers was not carried, and buyers are less likely to be associated with other brands.
- Tesla’s batteries, motors, and software are out-of-space competitors, enabling better range, acceleration, and high-tech features. A massive lead in the technology.
- Tesla uses direct online sales and company-owned stores rather than depending on third-party dealerships. It provides better control over the sales process and customer experience.
Let’s explore the current trends to analyze who can be a strong contender to challenge Tesla’s dominance in the EV market:
- Volkswagen Group: It is heavily investing in EVs and planning to launch 70 new EV models by 2030. The well-known modular MEB platform provides VW with cost and flexibility advantages such as ID.3 and ID.4. It can also meet the demand for millions of EVs, but it lacks the brand appeal and doesn’t own a charging network to allow its customers a hassle-free journey.
- BYD and Xpeng: With the rapid expansion of their EV production and leading China’s domestic market with their innovative technology, they have a successful road map in China. But in Europe and North America, it is challenging.
The EV market is heavily diverse across different regions, but challenging Tesla’s dominance is quite difficult for any one company. As per the current trends and reports, it will take the next 3–5 years to surpass or beat Tesla in the global electric market.
The key reason is its strategy to be first in the market, with mass production of over 1.3 million EVs in 2022, whereas other automakers are still ramping up production capacity and model availability, huge Supercharger networks, brand loyalty, and a technology lead in motors, aerodynamics, and especially in software and AI in the industry.
However, from my point of view, it looks surprising that traditional automakers like BMW, Mercedes, and VW are lagging mesmerizingly in the automotive industry. Or we are living in a different alternate world.
With such immense resources and manufacturing capability in traditional automakers, there are major reasons for Tesla to have an edge over the established ones:
- Tesla focuses on only EVs, provided its decision-makers adapt swiftly to the latest trends and technology without considering any ICE models. It was a huge risk to rely on a technology that had not yet been launched in the market, but it proved to be the best move.
- The company is surrounded by new software and digital technology for its entire business, whereas the original automakers are catching up with terms like OTA updates, AI driving assistance, etc.
- Tesla also prioritized its investment early and heavily in securing long-term battery cell supply. It didn’t move back from its massive purchase during the shortage period. A challenge for any individual automaker to meet.
- The established automakers underestimated the speed of change. They fail to anticipate the reason for the rapid fall in battery costs and how EV technology will become advantageous. They focused more on gradual transitions and ended up becoming too slow for the market to notice them.
- The traditional automakers failed to see Tesla as one of the potential candidates as a market disruptor in its early phase.
- The OEMs have a shorter term to dissect the present scenario of disruption and balance it out with massive global infrastructure and investment in traditional ICE vehicle manufacturing.
- It became challenging for big manufacturers to change their strategy and resource allocation, as well as hundreds of employees across massive auto companies, for quick adaptation due to a new trend in the market. The market for ICE vehicles collapsed in a slow but rapid way all around the world.
- A lack of bold and risky moves among the OEMs suffering from complacency, short-term thinking, and organizational inertia led to Tesla being where it is today.
As we can see, consumers are eager to always be connected to new technologies or be a part of massive innovation. The whole look of driving a vehicle with a charging battery, the cool looks of the charging networks, and of course not going through the petrol or diesel smell The world is changing for the better.
We can see the pattern with the consumers in the countries where EVs are a massive hit; they are well aware of the importance of sustainability and the crucial role of EVs, as well as their technological importance. It shows a market where new technological innovations are being developed, and if you believe in your ideas, you should be persistent to make them a top seller.