Tesla struggles as competition in electric vehicle market intensifies

In recent years, the electric vehicle market has undergone significant changes, particularly in the United States and Europe. Notably, Tesla sold 1.78 million electric cars last year, with its Model Y emerging as one of the most popular cars in Europe. However, even with sales, Tesla's overall revenue has declined, presenting challenges for the company. Furthermore, Tesla's market share in both the US and Europe is seeing a worrying decrease, now holding about 44 percent in the US as of 2024, down from 75 percent in early 2022. This decline coincides with the rise of competitors, particularly the Chinese manufacturer BYD, which sold 4.27 million electric vehicles last year, dominating the Chinese market significantly. Tesla's market share in China is minimal, and as this situation develops, it raises concerns about consumer choices as the EV landscape evolves rapidly. Additionally, protective measures and tariffs are being implemented by US authorities to restrict competition from Chinese electric vehicles, adding further complexity to the market dynamics and affecting sales diversification. On the other hand, Polestar, a brand that has recently gained traction in the electric vehicle market, is preparing to launch its compact SUV, the Polestar 7. As an EV-only brand by 2025, Polestar aims to capture a larger market share and diversify its offerings beyond its existing models, including the popular Polestar 2. The company, owned by China's Geely, faces challenges linked to the US' protectionist policies against Chinese car manufacturers. The shift towards a compact SUV showcases Polestar's strategy of targeting segments with higher sales potential in a competitive landscape. Both Tesla and Polestar's market performances highlight the ongoing battle for dominance in the electric vehicle sector, where consumer interest for emission-free mobility remains robust, despite the complexities arising from national policies and supply chain dynamics. As electric vehicles become increasingly essential in the automotive market, the competition among manufacturers will likely shape future consumer options. To navigate these challenges effectively, both companies need to innovate and adapt to changing consumer preferences and market restrictions that have emerged over recent years.