It is faltering badly when you consider first mover status and previously being the #1 EV brand in China. This would be like if GM/Ford/Chrysler lost their #1 status to Toyota in less than a decade.
Toyota didn’t start outselling GM until 2021. Honda and Hyundai still sell fewer vehicles than Ford and GM in the US.
Tesla still sells a lot of product and does relatively well for itself, but proportionally to its prior status in the market, it has fallen far.
Tesla’s small model range makes their numbers look better because they can say that their two volume models sell very well. In reality, BYD is shipping hundreds of thousands more BEVs than Tesla and Volkswagen Group is outselling Tesla in Europe.
Another way to put this is to say that it’s really impressive that the Model Y sells number similar to the RAV4 and CRV in the United States. It’s far less impressive when you consider the fact that Toyota has nine SUVs in their lineup.
When you have a small model lineup like Tesla has it skews things a bit. Let's say you have a buyer who really likes the Tesla brand and wants a subcompact city car, or maybe they want a 3-row SUV. Let's say about 40% of them say "you know what, I like Telsa so much, I'll compromise and get a Model 3 even though it's bigger than what I want" or they say "I'll get the Model YS even though it's not a full large sized 3-row SUV I want."
This scenario now pads the numbers for those models and makes it look like the Model Y/YS/3 are incredibly successful, even though they didn't quite fit their buyer demographic and those buyers might not be back as repeat buyers as soon as there's another option available on the market that works better for them.
This hypothetical leaves 60% of potential buyers defecting to other brands right away. They'll say, "Tesla doesn't make what I want, I'll go buy an EV9 or a Renault 5 instead, even though I prefer Tesla."
A lot of those buyers are buyers that Tesla could have had, but they don't have because their model lineup is too thin.
This is exactly why most large volume brands have some kind of badge engineering and sub-brands going on. Toyota doesn't lose any buyers that want a Camry but want it to be more luxurious, those buyers are directed to Lexus. Hyundai doesn't lose any buyers that want more aggressive/sporty/modern styling, those buyers go with a Kia.
Tesla sells far too many cars to not have any of this yet, but they've just under-expanded, IMO.