Electric vehicle sales are growing in the U.S.
Dealers sold 1.3 million EVs in the U.S. in 2024, a 7.3% year-over-year increase making EV sales 8.1% of the market, which was also an increase over 2023, according to a Cox Automotive analysis.
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At the start of the year, the firm believed EV sales would likely account for “close to 10%” of automotive sales in 2025. While it’s unclear how President Donald Trump’s recently enacted tariffs will affect this forecast, EVs are undeniably growing in popularity, albeit slowly.
This is undoubtedly good news for Tesla (TSLA) . As the unquestioned EV market leader, Tesla is most poised to benefit from an increase in the pool of potential buyers.
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However, with more potential buyers comes more competition, and suddenly, Tesla is being challenged in areas where it was previously unchallenged.
Tesla (TSLA) employs a liquid cooling system for its batteries, which gives them a lower degradation rate than air-cooled battery systems. According to one study, most EV batteries last between 15 and 20 years and have an average degradation rate of 1.8% per year.
While this setup gives Tesla an advantage over a Nissan Leaf, one of its biggest competitors in the U.S. is coming for Tesla’s battery crown.
GM is pulling out all the stops to make sure its EV business is viable.
FREDERIC J. BROWN/Getty Images
General Motors makes a big EV battery play
Recently, General Motors (GM) finished its $2.3 billion Ultium Cells battery factory just outside of Nashville, Tennessee, where up to 1,300 employees could eventually build the next generation of batteries for its EV fleet.
GM and LG Energy Solution, a Korean battery company, co-own this facility and another $2.3 billion one in Lordstown, Ohio.
General Motors, along with Tesla and South Korea’s Hyundai, are the companies most invested in selling EVs to America, according to a recent Bloomberg report.
GM has spent $35 billion over the past eight years to disrupt the EV market, and that investment is paying off.
GM now produces more battery cells than Tesla, even though its production facilities aren’t running at full capacity. When Bloomberg visited, the news organization witnessed only 250 workers at the 1,300-person facility.
The Nashville facility cranks out 5,000 finished battery cells per hour and runs 24 hours a day, 7 days a week. GM cut battery costs by $60 per kilowatt-hour last year and is targeting another $30 drop this year by increasing manufacturing yield.
If GM’s plan succeeds, it will reduce the cost of its battery packs to $100 per kilowatt-hour, a 50% reduction since 2023 that would beat even Tesla’s price.
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Tesla could be losing its EV market stranglehold
Earlier this month, Tesla reported first-quarter deliveries of 336,681 units, missing JPMorgan’s trimmed-down forecast by 18,000 vehicles, or 5.2%.
Its Q1 2025 deliveries were 13% less than the 386,810 vehicles the company sold during the same period last year and 32% lower than the record 495,570 it sold in the preceding quarter.
Unfortunately for Tesla investors, JPMorgan doesn’t see the first quarter dip as a one-off situation.
The firm lowered its full-year delivery estimates. JPMorgan expects Tesla to deliver 1,715,000 vehicles this year, down from its previous estimated 1,775,000.
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The firm reduced its first-quarter earnings estimate to 36 cents per share from 40 cents per share, well below Wall Street consensus estimates of 46 cents per share.
“We continue to see large downside to our $120 December 2025 price target,” analysts said.
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