Who Are Tesla's (TSLA) Main Competitors?

Tesla: An Overview

Tesla Inc. (TSLA) is an American electric car and power train designer, developer, manufacturer, and distributor headed by serial entrepreneur Elon Musk. The company was founded in 2003 and is headquartered in Palo Alto, CA. In August 2022, Tesla had a market capitalization of $884.91 billion.

In 2021, Tesla said that it would start production of its Cybertruck, an EV pickup with a 250-mile per charge range, in 2022. However and after rumors that the new model was being pushed back, Elon Musk confirmed that Tesla would not be launching any cars in 2022, and that the Cybertruck won't be produced for commercialization until 2023 at the earliest.

On the other hand, the first models of Tesla's electric Semi truck—initially scheduled for production in 2019, were delivered to PepsiCo on December 2022. Musk said the company is aiming to produce 50,000 Semis for North America in 2024.

Tesla is also involved in providing services to other automotive companies by, for example, selling its battery technology.

However, Tesla has two primary revenue segments—automotive sales and development services. Automotive sales account for the lion's share of the revenue. 

Tesla has seen marked growth after years of breakeven performance: its reported annual net income for 2021 was $5.524 billion, a 700.58% increase from 2020, and its reported annual net income for 2022 was $12.583 billion, a 127.79% increase from 2021. Only for Q3 2022, Tesla's net income was $3.714 billion, a 59.67% increase year-over-year.

Key Takeaways

  • Tesla has several competitors among traditional carmakers, such as Ford and Honda. 
  • Tesla has managed to see success by focusing on premium electric vehicles (EVs).
  • There is more competition, however, now entering the higher-end electric and self-driving car market.  
  • Ford, General Motors, Nissan, Nio, and Honda are some of Tesla's main competitors.
  • Still, when it comes to luxury EVs, Tesla owns the top spot. 

Tesla's Competitors

Tesla may be the most recognized company in the electric vehicle industry but that doesn't mean it's the only one.

Traditional car companies are increasing their offerings of hybrid gasoline-electric cars as well as pure electric vehicles, such as the Nissan Leaf. What's more, in China, where Tesla is a well-known brand, it holds just 6.6% of EV market share.

Competitors continue to ramp up manufacturing and sales efforts, and with good reason. Fortune Business Insights estimated an annual growth rate of 24.3% for the worldwide electric vehicle industry, from $287.36 billion in 2021 to over $1.3 trillion in 2028.

Still, Tesla cars carry with them a certain high-status cachet that has not yet been attained by the incumbent automakers.

Below are some of Tesla's main competitors.

Ford Motor Company

Ford Motor Company (F) is a multinational automobile manufacturer founded in 1903. It's strongly focused on electric cars, trucks, and SUVs. Ford's Mustang Mach-E model received Car and Driver's first Electric Vehicle of the Year award in 2021.

According to Ford, it's investing $22 billion through 2025 to pursue vehicle electrification. The aforementioned Mustang, the F-150 Lightning pickup and E-Transit van are just three electric vehicles in the lineup to come. What's more, Ford is focused on building EVs that provide the legendary features it's known for: performance, capability and productivity.

One of Ford's target markets is fully electric commercial vans and pickups. It intends to deliver the benefits of electric vehicles via an accessible price point and lower cost of ownership. The all-electric F-150 Lightning pickup officially launched in April 2022. Since then, more than 4,400 have been sold.

Ford is headquartered in Dearborn, MI. In August 2022, its market capitalization was $63.31 billion.

General Motors

General Motors (GM) is a U.S.-based automobile manufacturer founded in 1908. Responding with urgency to climate change, GM is committed to an all-electric future.

GM plans to design, engineer, and produce EVs for every style and price point, including a Chevrolet Silverado EV with a 400-mile range. Furthermore, it's also building a competitive advantage in batteries, software, vehicle integration, and manufacturing.

It will invest $35 billion globally in EV and autonomous vehicles (AVs) through 2025. It projects that it will sell one million EVs annually, in North America and China. GM has sold more than 100,000 Bolt EVs since its launch in 2017. The Bolt has received some of the best satisfaction and loyalty ratings in the industry. Three-quarters of Bolt EV buyers in the U.S. are new to GM.

Batteries are a major part of GM's EV strategy. Its Ultium battery packs cost almost 40 percent less than those in Chevy's Bolt EV. Moreover, the company has estimated that its second generation Ultium packs will cost approximately 60% less than batteries used in cars currently. Its manufacturing platform will handle batteries for all its EVs, based on a single, common cell and interchangeable propulsion components.

General Motors is headquartered in Detroit, MI. EV batteries will be manufactured in Lordstown, OH. In August 2022, it had a market capitalization of $58.39 billion.


NIO Inc. (NIO) is a Chinese holding company that designs, manufactures, and sells premium smart electric vehicles for the international market. These include the EP9, which it asserts is among the fastest electric cars in the world, and its flagship SUV, the ES8. Nio also offers customers power solutions that include access to public charging, access to power mobile charging trucks, and battery swapping.

According to NIO, it stands apart by its "continuous technological breakthroughs and innovations, such as its industry-leading battery swapping technologies, Battery as a Service, or BaaS, as well as its proprietary autonomous driving technologies and Autonomous Driving as a Service, or ADaaS."

In July 2022, NIO delivered 10,052 vehicles. That was an increase of 26.7% year-over-year. For the year through July, it delivered 60,879 electric vehicles, an increase of 22% year-over-year.

The company was founded by Li Bin and Qin Li Hong in November 2014 and is headquartered in Jiading, China. Its research and development center for autonomous driving is located in San Jose, CA. In August 2022, NIO had a market capitalization of 32.85 billion.


Volkswagen is one of the largest automotive manufacturers in the world. Its highly recognizable products and brands include Volkswagen cars, Audi, Bentley, Lamborghini, Porsche, and Skoda.

A decade after Tesla emerged on the EV scene, Volkswagen has quietly been making inroads. It estimates that 50% of its U.S. sales by 2030 will be EVs. It's spending tens of billions to meet this goal. It also plans to produce 1.5 million electric vehicles by 2025 to help buyers meet the EU’s expected emission targets.

In 2019, Volkswagen announced that it would launch almost 70 new electric models over the following ten years. Based on that, it expected to build 22 million vehicles on electric platforms.

Volkswagen is developing a comprehensive decarbonization program that's committed to the goal of CO2-neutral balance in all areas from fleet to production to administration by 2050.

Founded in 1937, Volkswagen has survived world war, countless cycles of boom-and-bust, as well as the infamous 2015 emissions scandal in which it admitted that many VW diesel engine cars sold in America had built-in software that could detect when they were being emission-tested and could alter performance for better results.

Volkswagen is headquartered in Wolfsburg, Lower Saxony, Germany. In August 2022, Volkswagen had a market capitalization of $85.66 billion.

On Nov. 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act. The bipartisan infrastructure bill authorizes $1.2 trillion in spending, including funding for the following initiatives:

  • Building out the network of EV charging stations: $7.5 billion
  • Spending on roads and bridges: $110 billion
  • Broadband investment and internet access: $65 billion

The legislation is good news for Tesla and other U.S. EV manufacturers since it will accelerate the deployment of EV chargers nationwide along highways and within local communities. The legislation is designed to increase EV adoption by expanding the network of EV chargers to 500,000 nationwide.

What Is Tesla's Competitive Advantage?

Market share is an important competitive advantage to capture and maintain. Tesla has four EVs that own part of the electric vehicle market. As of October 2022, the top five selling cars and their market share for Q2 were:

  1. Tesla Model Y (30.4% market share)
  2. Tesla Model 3 (27.8%)
  3. Ford Mustang Mach-E (5.6%)
  4. Tesla Model S (4.6%)
  5. Hyundai IONIC 5 (3.8%)

(Note that Tesla’s Model X ranked eighth with 3.3% of the market share.)

Tesla remains the dominant player in the total luxury car market, but not necessarily in the EV market. According to Cox Automotive, Tesla was the top-selling luxury brand in the U.S. That comparison included well-known names such as Audi, BMW, Cadillac, Lexus, and Mercedes-Benz.

However, Tesla’s share of the EV segment is dropping as the EV market expands and more makers either enter or establish a greater foothold in the EV market. In 2022, Tesla 's market share dropped to about 65% of new electric vehicles sales from about 72% in 2021. Tesla U.S. market share in Q4 2022 was about 58%, down from almost 78% in the Q4 2021.

Despite the drop in the EV market share, Tesla is continously increasing its global market share. In 2022, Tesla's market share in the U.S. and Canada was nearly 4%.

Potential Competitive Advantages

  1. Whether or not it can command a leading position in the EV industry any longer, Tesla has solid brand recognition. Plus, it gets ongoing word-of-mouth advertising.
  2. For autonomous driving, Tesla may have around two billion miles of data captured through its Autopilot driver-assist feature. It's assumed that this data can and will enhance Tesla's self-driving algorithm.
  3. Tesla's batteries continue to power its vehicles farther than most others. The Tesla Model S has a range of 405 miles.

Who Is Tesla's Biggest Competitor?

Tesla has a number of big competitors. Among those, Nio, in China can be considered one, despite the fact that it has delivered fewer vehicles. Ford continues its march with its EVs, including the popular Mustang Mach-E and F-150 Lightning pickup.

Who Are Tesla's Top 3 Competitors?

Ford, GM, NIO, and Volkswagen are four of Tesla's main competitors. In 2022, the Chinese manufacturer BYD sold more than 1.85 million plug-in electric cars, more than tripling its 2021 result of 593,745. Another Chinese company, SGMW, surpassed 1.6 million units the same year, so both companies should be considered. SGMW is a joint venture between China's SAIC Motors, General Motors, and Liuzhou Wuling Motors Co. Ltd. Of all of these players, Tesla has the largest current market cap.

How Many Electric Vehicles Has Tesla Sold?

Tesla's vehicle deliveries in the fourth quarter of 2022 amounted to nearly 405,300 units, a new record for the brand. Here's a breakdown of the number of Tesla vehicles delivered worldwide throughout 2022 (in 1,000 units):

  • Q1: 310.05
  • Q2: 254.7
  • Q3: 343.83
  • Q4: 405.28

Total for 2022: 1,313.86

The Bottom Line

While it has an enormous market capitalization and still enjoys fame for establishing the electrified vehicle market, Tesla has an increasing number of strong competitors to contend with.

Ford, GM, China's NIO, and Germany's Volkswagen are just four of many automakers grabbing headlines and market share for their efforts in EV.

Tesla may be able to count on its innovations and brand ambassadors to maintain a noteworthy position in the EV rankings. However, it appears that challengers will have much to say about that, with their own game changing advancements in manufacturing, battery technologies, and autonomous driving breakthroughs. At least for now, in the luxury car market, Tesla continues its ride on top.

Correction—Feb. 7, 2023: A previous version of this article incorrectly reported Tesla's number of vehicle deliveries for 2022.

Article Sources
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