Tesla, the electric car company founded by Elon Musk, has been the undisputed global electric car market leader for years. But in 2023, the company faced fierce competition from other manufacturers, especially from China, and lost its crown as the world's top electric car maker.
According to the latest data from the International Energy Agency (IEA), Tesla sold 1.8 million electric cars in 2023, a 20% increase from 2022. However, more was needed to keep up with the rapid growth of the overall electric car market, which reached 14 million sales in 2023, a 35% increase from 2022.
Tesla's market share dropped from 18% in 2022 to 13% in 2023, while its Chinese rivals surged ahead. The top electric car maker in 2023 was BYD, a Chinese company backed by Warren Buffett, which sold 2.1 million electric cars, a whopping 80% increase from 2022. BYD's market share rose from 12% in 2022 to 15% in 2023.
The second place was taken by SAIC, another Chinese company, which sold 1.9 million electric cars, a 50% increase from 2022. SAIC's market share increased from 10% in 2022 to 14% in 2023. SAIC produces electric cars under various brands, such as MG (MG Cyberster), Roewe, and Wuling. The latter is known for its popular mini EV model, which sells for less than $5,000 and is the best-selling electric car in China.
The third place was occupied by Volkswagen Group, which sold 1.7 million electric cars, a 40% increase from 2022. Volkswagen's market share remained stable at 12% in 2023. Volkswagen Group includes brands such as Audi, Porsche, Skoda, and Seat. The most popular electric car model from the Volkswagen Group was the Volkswagen ID.3 hatchback, which sold over 300,000 units in Europe.
The fourth place was held by Hyundai-Kia, which sold 1.2 million electric cars, a 30% increase from 2022. Hyundai-Kia's market share declined slightly from 9% in 2022 to 8% in 2023. Hyundai-Kia offers several electric car models, such as the Hyundai Kona EV, the Hyundai Ioniq EV, and the Kia Niro EV. The company also launched its new EV platform, E-GMP, in late 2022, which promises a longer range and faster charging.
The fifth place was shared by two companies: Renault-Nissan-Mitsubishi and Geely. Both sold around 800,000 electric cars each in 2023. Renault-Nissan-Mitsubishi's market share dropped from 7% in 2022 to 6% in 2023, while Geely's market share increased from 4% in 2022 to 6% in 2023. Renault-Nissan-Mitsubishi is known for its popular models, such as the Renault Zoe and the Leaf, while Geely owns several brands, such as Volvo, Polestar, and Lynk & Co.
The rest of the top ten electric car makers in 2023 were Toyota (600,000 sales), GM (500,000 sales), BMW (400,000 sales), and Honda (300,000 sales). All of these companies increased their sales compared to 2022 but lost market share due to the faster growth of their competitors.
What explains Tesla's decline and China's rise?
Tesla has been the pioneer and innovator of the electric car industry for over a decade. The company has built a loyal fan base and a strong brand image around its visionary founder Elon Musk. Tesla has also been ahead of its rivals in terms of battery technology, software updates, self-driving features, and charging network.
However, Tesla has also faced several challenges that have hampered its growth and profitability. The company has struggled with production delays, quality issues, legal disputes, regulatory hurdles, and high costs. Tesla has also faced increasing competition from both traditional car makers and new entrants in the electric car market.
One of the biggest threats to Tesla's dominance has been China, the world's largest car market and the leader in electric car adoption. China has been aggressively promoting electric cars to reduce air pollution, energy dependence, and greenhouse gas emissions. The Chinese government has provided generous subsidies, tax incentives, and preferential policies for electric car makers and consumers.
As a result, China has become a hotbed for innovation and entrepreneurship in the electric car industry. Hundreds of electric car startups have emerged in China, offering a wide range of models, prices, and features. Some of these startups, such as Nio, Xpeng, and Li Auto, have become global players. Others have focused on niche segments, such as luxury, performance, or low-cost.
China has also developed a strong electric car manufacturing and supply chain ecosystem. China is the world's largest producer of electric car batteries, motors, and other key components. China also has the world's largest network of charging stations and battery-swapping stations.
Tesla has tried to tap into the Chinese market by building its own factory in Shanghai and launching its Model 3 and Model Y models there. However, Tesla has faced several challenges in China, such as price competition, consumer complaints, safety issues, and government scrutiny. Tesla has also been accused of spying and data theft by some Chinese authorities and media outlets.
Tesla's market share in China has declined from 21% in 2019 to 11% in 2022 and 8% in 2023. The global chip shortage has also affected Tesla's sales in China, which has disrupted its production and delivery. Tesla has also faced difficulties in expanding its sales and service network in China due to the need for more local partnerships and regulations.
An alternative opinion is here: Top 10 Electric Car Makers in the World in 2023.