According to a recent research report by BloombergNEF, Tesla's leading position in battery technology has given it a cost advantage for several years and has also helped it to meet the challenges posed by new competitors.
Batteries produced by Tesla and Panasonic require relatively little cobalt, and with the increasing demand for electric vehicles, cobalt prices are rising rapidly. On June 5th, Musk stated that Tesla plans to achieve a cell-level price of $100 per kilowatt-hour by 2018, and plans to reduce battery pack costs to below that level within two years. However, Bloomberg New Energy Finance predicts that the average price of battery packs will not fall below $100 until 2025. Bloomberg New Energy Finance noted in its report, "If Tesla achieves this price target, it will be years ahead of the industry average." Other battery manufacturers reduced the price to $120 per kilowatt-hour in 2017, indicating that Tesla is not the only company leading this technological development curve.
Tesla has failed to extend its dominance in the US electric vehicle market to other regions, and it currently faces threats from new models from European brands such as Volkswagen, Daimler, Volvo, and BMW. Competition will be most intense in the SUV and crossover segments, where the Model X is expected to face challenges from new models like the Jaguar Land Rover I-Pace, Audi E-Tron, and Hyundai Kona by 2019. Daimler-Benz unveiled the EQC crossover in Stockholm on Tuesday as part of its plan to invest at least €10 billion to expand its electric vehicle lineup.
The report indicates that as consumers have more choices, competition will no longer focus solely on the number of electric vehicles available on the market, but rather on smaller issues such as price, quality, after-sales service, and user experience. If Tesla hopes to maintain its leading position in the electric vehicle industry, it still has room to catch up with these automakers.
In comparison, Tesla and BYD are the only two vertically integrated electric vehicle manufacturers globally, but their dominance is primarily due to their long-term advantages in battery technology. Bloomberg New Energy Finance data shows that BYD is currently the global leader in electric vehicle sales with a market share of 9.9%, while Tesla follows closely with only 9.7%.
Bloomberg New Energy Finance believes that, from other perspectives, Tesla is currently ramping up Model 3 production, and its products will continue to maintain a certain advantage until 2020. Tesla needs to invest heavily in China, as well as develop semi-trucks, Model Y, and pickup trucks. Meanwhile, delays in Autopilot performance upgrades and a lack of mobility services have also put it behind other automakers. The SunCity business, acquired for $2.1 billion, has also failed to meet expectations.
