The State of the Electric Vehicle Market Ahead of the Summer 2023 Earnings Season


Electric Revolution

The prolific Elon Musk disrupted the auto industry, when he essentially created the electric vehicle (EV) market, with Tesla Motors Inc. Over the past years, legacy automakers, tech giants and EV startups have been throwing their hats in the arena, but Tesla remains ahead with a broader vision for a world without fossil fuels.

Many countries around the world have been facilitating the transition from internal combustion engines to clean energy vehicles, in order in order to reduce CO2 emissions and help in achieving climate neutrality.

Earlier this year, the European Parliament passed legislation that aims to ban the sales of diesel and petrol passenger cars and light commercial vehicles from 2035 [1]. The Biden Administration in the United States looks to have 50% of all new vehicle sales be electric by 2050, having announced private and public sector investments to accelerate this shift a few months back. [2]

Nearly 321,000 Battery Electric Vehicles (BEVs) were sold in the first quarter within the European Union, according to the European Automobile Manufacturers' Association (ACEA). This was not only a significant surge from a year ago, but also marked an increase in BEV market share to over 10%.[3]

The Kelley Blue Book estimates that 258,882 electric vehicles were delivered in the United Sates during the same period, an approximately 50% growth compared to Q1 2022 [4]. Europe and the United States are two of the biggest markets for electric cars, but China holds the top spot. According to the country's Association of Automobile Manufacturers (CAAM), sales of passenger BEVs exceeded one million units in Q1. [5]

The electric vehicle industry has been expanding rapidly, with 10 million cars sold worldwide in 2022 as per the International Energy Agency (IEA). The Agency expects growth of 35% in the current year capturing a higher market share of 18%, from 14% last year. [6]

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External Adversities

Despite prospects for continuing growth, the auto industry faced a challenging 2022, with many EV makers struggling, while headwinds have persisted into this year. It was marked by economic uncertainty, high inflation and aggressive monetary tightening by most major central banks around the world, as trade disruptions did not dissipate.

The situation is not good for demand, since higher rates make funding for new cars more expensive, economic uncertainty puts off prospective buyers and higher prices squeeze disposable income making the already pricey electric cars less affordable.

This environment is adverse for EV makers, for their bottom lines and their stock valuations. Start-ups are even more vulnerable, since they are often unprofitable and require capital to ramp-up production and capture market share.

Even though 2023 started with optimism for a moderation of the restrictive monetary policies that had harmed stock markets last year, it looks like some major central banks are set to deliver more rate hikes. Furthermore, in spite of easing inflation, prices remain elevated in many key countries and fears of economic slowdown persist.

EV King Tesla

CEO Elon Musk is the one that essentially created the electric vehicle (EV) industry and Tesla remains the undisputed leader, while maintaining a broader vision for a clean energy world. In a historic achievement, the Model Y became the world's best-selling car in Q1, as per JATO Dynamics and Motor 1 [7].

In spite of its dominant position, Tesla Motors inc has not escaped the unfavorable external environment. During May's Investor Day, Mr Musk spoke of a "challenging twelve months", as interests rates increase and credit conditions tighten. [8]

Signs of weak demand have been evident in the delivery/production gap witnessed over recent quarters, which persisted into Q1 2023. Tesla produced 440,808 and handed over of 422,875 cars in that period, marking a 44% and 36% y/y growth respectively. [9]

To address softer demand, the firm made a series of price cuts, with its cheapest model starting at just over $40,000 in the US (without credits and incentives) [10]. Tesla took a hit to its profitability from this move and its Net Income slumped by 24% y/y in Q1, but margins are still industry leading, allowing it to pursue volume over margins.

The EV leader did not launch any new models last year (other than the commercial Semi), but plans to begin deliveries of the long-awaited futuristic Cybertruck "later this year" according to Mr Musk, while production of the niche Roadster was pushed back to 2024. [8]

The big bets though are the further ramping up of production and the launch of an affordable electric car, which had been part of Mr Musk's original Master Plan from back in 2006 [11]. Earlier this year, executives had outlined an assembly process that will lead to a 50% reduction in costs and 40% less manufacturing footprint, which would allow for a cheap model. Elon Musk teased new vehicles in May, in what may have been a hint of such an affordable model.[8]

Despite their shortcomings, Tesla Motors Inc and its prolific CEO remain at the pinnacle of the EV revolution and play at a different level, as they push on the autonomous driving front, solar panels and charging networks, humanoid robots and more. A testament to this, is also the fact that Tesla is entering into lithium refinery – a key component for batteries – to address the spike in prices after the Ukraine-Russia war. [12]

Legacy Behemoths

Tesla is the undisputed leader of the EV market, but its reign is not unchallenged, as legacy behemoths focus increasingly on purely electric cars. US-based Ford, Germany's Volkswagen and China's BYD are some of the more prominent rivals, but definitely not the only ones.


The US legacy automaker is pushing hard on the electrification front under the leadership of CEO Jim Farley. Around a year ago, it launched the F-150 Lightning in the US, the electric variant of America's beloved truck. The model has been an instant hit, with cumulative sales of more than 20,000 units as of the end of Q1, and received critical acclaim, winning MotorTrend's Truck of the Year 2023 award. [13]

On a global scale, Ford sells the already established Mach-E SUV, which has claimed various accolades, including Car and Driver's 2021 EV of the Year [14]. More to it, a few months back, it announced a new all-electric crossover to be built in Europe. [15]

In order to highlight and accelerate its transformation, the Ford Motor Company changed its business and reporting structure, with the electric business now being a standalone segment. Ford Model E is essentially a startup that lost 722 million in Q1 [16]. It is projected to lose $3 billion this year, but the firm expects 8% adjusted profit margin by the end of 2026 and a run rate of 600,000 EV sales by the end of the year. [17]


The German-based colossus is one of the world's biggest automakers, with the VW Group including more brands, such as Seat, Skoda, Audi, Porsche and more. The group has been making strides in clean energy, having delivered 141,000 Battery Electric Vehicles (BEV's) in the first quarter of the year, marking a 42.1% y/y rise. [18]

The Volkswagen brand itself is the main driver, with sales of 70,000 BEVs and an expanding fully electric line-up. The iD4 SUV and iD5 Coupe SUV were the best-selling models with 41,900 units. The company recently announced the iD7 in the upper mid-size class, with deliveries expected in autumn to China and Europe. Most importantly though, it announced an entry-level electric car, to be priced at just €25,000 by 2026. [19]

The German manufacturer aims to offer the widest model range in Europe and to capture 80% of the continent's electric car market by 2030, while planning to exclusively produce EVs from 2033 onwards.


BYD Co ( is a Chinese multinational tech company, founded in 1995, manufacturing passenger and commercial vehicles, batteries and more. Its first plug-in hybrid car (PHEV) hit the market in 2008 and the firm has since become a major producer of electrified vehicles. [20]

In the first quarter, it delivered 264,647 passenger BEVs, nearly doubling from a year ago and dominating the domestic market. The figure is below Tesla's count, but exceeds it if the plug-in hybrids are added (547,917) [21]. Elon Musk recently noted that BYD's cars are "highly competitive" these years, in recognition of its progress. [22]

China is the main market for BYD, but it also sells cars in various European countries, such as the UK, Germany and Norway, which has emerged as an EV hub. It already offers three fully electric vehicles in the European market and recently announced two new models, deliveries of which are expected to start this summer and towards the end of the year. [23]

EV Startups

Despite the current unfriendly economic environment, there has been a flurry of start-ups, such as China's Nio and the US offroad-focused Rivian, attempting to compete with Tesla and the other traditional auto giants, pushing the envelope forward with often ground-breaking designs.


The Chinese multinational designer and manufacturer of smart electric vehicles (EVs), was founded in 2014. It already has a broad line-up across different segments and launched its newest model in the country a few days back - the ES6 SUV. [24]

Nio ( handed over 31,041 vehicles in the first quarter of the year, up 20.5% y/y, easily beating domestic rival XPeng [25]. China is its main market but the firm has a strong presence in Europe as well, offering not only some of its models, but also an expanding network of showrooms, service stations and charging solutions. [26]

The EV startup has also pioneered a state of the art battery swap solution, which allows the changing of a car's battery pack within a few minutes [27]. It recently reached 14,000 Power Swap Stations, with more than 22 million completed changes, while it also started deploying the third-generation infrastructure. [28]


Rivian Automotive is a US firm that was founded in 2009 and become publicly traded less than two years ago [29]. It made a big splash in the auto industry as it beat everyone to the electric pick-up truck market, with the impressive and innovative R1T. [30]

Deliveries begun in September 2021, with the R1T receiving praise from many auto journalists and winning MotorTrend's Truck of the Year 2022 award [31]. The firm has expanded its line-up with the R1S SUV and also manufactures a commercial delivery van (EDV). In late-May, CEO RJ Scaringe, offered a small glimpse of the next-gen more compact and cheaper R2 platform, but that's still a couple of years out. [32]

However, the electric off-road segment could get crowded soon, as Ford already sells the F-150 Lightning, EV leader Tesla is finally looking to begin deliveries of its futuristic Cybertruck this year, while General Motors plans to put the electric Chevrolet Silverado in production this year [33] and start handing over the GMC Sierra EV in 2024. [34]

Although Rivian Automotive reaffirmed its 50,000 units 2023 output target, it has struggled to ramp up its capability, amidst the adverse external environment and a difficult first quarter. This has also created demand headwinds, since the firm produced 9,395 vehicles in the first quarter of 2023, but delivered only 7,946, constituting a significant gap. [35]


Monetary tightening and high inflation are some of the factors that pose headwinds for auto makers and the electric vehicle (EV) industry, with signs of weaker demand having appeared. However, the market is expected to continue its rapid growth.

In an increasingly completive market, legacy automakers and startups alike are making strides in electrification, with innovative and impressive lineups. However as the next earnings season approaches, Tesla seems well positioned to maintain its lead, despite the recent slump in its bottom line, as its profit margins are unreachable by other EV makers. Furthermore, it continues to expand its activities into various sector, with a multifaceted plan to promote clean energy solutions.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.



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