This was a stunning news item that I didn’t catch until the end of Iqtidar Ali’s article about Tesla’s 2023 financials and shareholder report. Despite following the industry extremely closely and putting together unparalleled auto industry sales reports every quarter, this stunned me because it hadn’t hit me that Tesla’s California factory in Fremont had become the #1 automobile production facility in the United States. And it felt like the lede had been buried, so I didn’t want to bury it again in another broader article about auto industry sales. Tesla didn’t even highlight this in its shareholder letter, which seems like a missed opportunity, but there was a lot to highlight.
Tesla now has the largest auto factory in the USA. Let that sink in.
Of course, we know that the Tesla Model Y became the best selling model in the world in 2023 and many of those are built in Fremont, California. And we know that Tesla’s sales have grown leaps and bounds in the past several years. Still, when you think of the US auto industry, you think of the Big 3, you think of the giant electric pickup truck market and the Ford F-150, you think of Detroit. Tesla is the “upstart,” the contender, the hot young teenager on the block. It’s a testament to many things — including the manufacturing workforce of Silicon Valley — that the Fremont factory has become the behemoth that it has become.
Jumping back to some numbers, it’s interesting to look at how much Tesla’s share of the US auto sales market has grown in the past five years. Here’s the breakdown from 2019 onward:
- Tesla = 1.1% of US auto sales market in 2019
- Tesla = 1.4% of US auto sales market in 2020
- Tesla = 2.4% of US auto sales market in 2021
- Tesla = 3.7% of US auto sales market in 2022
- Tesla = 4.3% of US auto sales market in 2023
Look at that rise! Similarly, here’s how the share of pure electric vehicles (BEVs) has grown in the US in that timeframe:
- BEVs = 1.4% of US auto sales market in 2019
- BEVs = 1.7% of US auto sales market in 2020
- BEVs = 3.0% of US auto sales market in 2021
- BEVs = 5.5% of US auto sales market in 2022
- BEVs = 7.2% of US auto sales market in 2023
Tesla dominates the US BEV market, but it also inspires and pushes other automakers to design, develop, produce, and sell more attractive and capable electric vehicles. That was the company’s mission from the beginning, and it continues to do so by leading from the front. However, increasingly, Tesla isn’t just a leader in the US BEV market, but also in the US auto market overall.
“Before Tesla purchased the Fremont factory, the record output of the previous owner was nearly 430,000 vehicles made in a single year. In 2023, the Tesla Fremont factory produced nearly 560,000 vehicles thanks to our ~20,000 Fremont-based employees,” Tesla wrote in its Q4 2023 shareholder letter. That’s 20,000 jobs in Fremont alone. There’s also the giant and fast growing gigafactory in Texas, the original gigafactory in Nevada, the Palo Alto offices, and other Tesla facilities around the country.
In the midst of everything else, and due in part to the short-term focus we humans tend to have, it’s easy to under-acknowledge and even miss some of the milestone changes Tesla has brought about in the US.
New targets have to be 5% Tesla market share and 10% BEV market share in the USA. And as the BEV market rises and broadens, one can’t assume Tesla will stay above 50% of the market. I don’t expect Tesla to account for 10% of US auto sales when BEVs get to 20% market share. On the other hand, looking back at what Tesla has achieved in the past decade and taking the Cybertruck and a more affordable coming Tesla into account, it wouldn’t actually be that surprising! We’ll see. What are your expectations for Tesla market share and BEV market share in the US in 2025 and 2030?
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