Tesla Owners Are Turning Away from Electric Cars
More than Half Are Switching Back to Internal Combustion Engine Vehicles
Sales Plummet for Tesla
Tesla’s EV sales are experiencing a sharp decline. Sales are dropping in both China, the world’s largest EV market, and the US, signaling potential trouble for this year’s performance. With a significant drop in market share, there are growing concerns that meeting the annual sales target of 2 million units may become nearly impossible.
Industry reports show that Tesla sold 830,000 units globally in the first half of 2024. This represents a 6.5% decrease compared to the same period last year. Performance in Tesla’s home market, the US, has been particularly weak.
Q2 sales down 15%
32% of people continue to drive EVs
According to the automobile market research firm Cox Automotive, Tesla is estimated to have sold 148,000 units in the US market in the second quarter of 2024. This figure represents a 15% decrease compared to last year. This is the first time Tesla has seen two consecutive quarters of declining sales since 2012. In particular, it was revealed that the decline in sales was largely due to existing customers turning away.
According to research by McKinsey & Co., which is considered the world’s number one consulting group, 51% of Tesla owners in the US said they would choose internal combustion engine vehicles to replace EVs in 2024. Only 32% of Tesla owners said they would continue to use EVs.
American consumers are reluctant to buy EVs because they are inconvenient and expensive
About 10% of Tesla owners indicated they would opt for a hybrid vehicle as their next purchase, while 6% preferred a plug-in hybrid. Despite the rising interest in hybrids as an alternative to EVs, the shift among Tesla owners towards hybrid options remains relatively modest.
Tesla owners are not alone in their hesitation towards EVs. A survey by J.D. Power reveals that the proportion of consumers not considering an EV has increased by 4% from the previous year, now standing at 23%. The main reasons for this reluctance include a lack of charging infrastructure (52%, multiple responses allowed), the high cost of EVs (47%), inconvenience related to charging time (45%), and insufficient driving range on a single charge (43%).
Tesla is preparing a new model. Will it turn around sales next year?
Despite a series of troubling indicators for Tesla’s performance, there are some positive signs. The intention among Tesla owners to continue driving electric vehicles (EVs) has risen significantly, with 32% of owners expressing this commitment in 2024, up from just 9% in 2020—a 23% increase over four years.
Additionally, there is a growing demand for new models to attract consumers through direct sales. To meet this demand, Tesla plans to introduce its new entry-level model, the Model 2, in the first half of 2025. Priced around $32,500, the Model 2 is expected to be more affordable than the current Model 3, which sells for $38,900 in the US. The launch of the Model 2 will be closely watched to see if it can effectively lower the price barriers and stimulate further interest in EVs.
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