If their sales are increasing and market share is dropping that signals that incumbants have been dragged kicking and screaming into the EV market
As an investor in TSLA I dont understand why this is presented as a negative outcome, its quite literally what they are attempting to do by making their patents open.
Chart here: https://pbs.twimg.com/media/Fth_aAtXwBQDUvK?format=png&name=...
https://www.counterpointresearch.com/global-electric-vehicle...
I think there's a real question as to how much marketshare Tesla will have in the future. As you note, Tesla may have dragged incumbents into the EV market kicking and screaming. That doesn't mean Tesla will end up as a winner in that market.
Right now, Tesla has a market cap of $572B. That's 3x more than Toyota and nearly 7x more than Volkswagen (#2 and 3 by market cap). Let's say that Tesla becomes the next Toyota in 10 years. To an extent, that means Tesla being worth significantly less in 10 years than today. It seems more likely that Tesla would end up in the Mazda to Volkswagen part of the market - $5B to $85B.
Maybe Tesla will have amazing margins that never fade. That seems unlikely. Companies generally can't hold onto margins without significant ways of keeping out competition. What is keeping a competitor from creating a similarly appealing vehicle forcing Tesla to lower prices and margins? I'm not saying that Tesla doesn't have some advantages. Their early investments in EVs put them in a good position. However, those advantages probably aren't going to last a decade.
This is bad news for Tesla because as the incumbents ramp up their EV offerings, Tesla's share of the pie is going to continue shrinking. Right now, it's 62% and there's barely any competition. As competitors actually get models to market, things might change fast. Chevy will be getting their Blazor and Equinox EV SUVs to market soon. Hyundai and Kia are ramping up their EV options. VW will likely be introducing more. Ford can't keep its F-150 Lightning in stock, but will be ramping up EV capabilities. Not only the incumbents, but new players like Rivian and Fisker are getting into the game. The Chinese Polestar (owned by Geely via its purchase of Volvo) is bringing its vehicles to the US. It might only be a matter of time before BYD joins.
What does Tesla look like in a decade? Are they selling more cars than Toyota is today? I doubt it - not even because of any judgment about Tesla; it's just that the odds of any company (no matter how great) achieving that are just so small. I think the most likely outcome is that Tesla's margins fall as they need to lower prices to deal with a newly competitive EV market, they continue growing, and they become a successful car company like BMW. But BMW isn't worth $572B. There's even a case to be made that they'll end up more like Honda, worth less than a tenth of what Tesla is worth.
This is bad news because it means that once other EVs are available, Tesla becomes a smaller share of EV sales. As more models become available and competitors get better at it, Tesla's marketshare will likely fall to that of a normal car company. That wouldn't be a problem if Tesla were priced like a normal car company (or priced like a company that could become a normal car company in a decade). The problem is that Tesla is priced like it's going to take over the entire auto industry leaving every company dead in its path.
Tesla has won their argument: that EVs are a viable vehicle. That's very different from winning from the perspective of an investor.
I would say, that Tesla has nothing to do with it. Governmental regulations and mandates are responsible for that.
Without Tesla we might still have low volume "compliance" EVs and manufacturers would be lobbying that such regulations would be impossible to meet or detrimental to the auto industry and its part in the economy.