Tesla has been the undisputed leader in the electric vehicle market for years, but a new report suggests that its dominance may soon be challenged by the traditional automakers. The report, titled “Car Wars 2022-2025”, is an annual analysis of the U.S. automotive industry by Bank of America Merrill Lynch. It forecasts the product plans, market share, and profitability of the major automakers in the next four years.

According to the report, GM, Ford, and Stellantis are expected to launch a combined 37 new electric vehicles in the U.S. market by 2025, compared to Tesla’s 10. This would increase their combined EV market share from 12% in 2020 to 34% in 2025, while Tesla’s share would drop from 79% to 52%. The report also predicts that GM, Ford, and Stellantis will achieve higher average transaction prices and profit margins than Tesla by 2025, thanks to their economies of scale, lower battery costs, and loyal customer base.

The report attributes the aggressive EV push by the legacy automakers to several factors, including the Biden administration’s support for electrification, the rising consumer demand for EVs, the increasing competition from new entrants like Rivian and Lucid, and the need to comply with stricter emissions regulations around the world. The report also notes that traditional automakers have an advantage over Tesla in terms of their established dealer networks, service capabilities, and brand recognition.

However, the report also acknowledges that Tesla still has some strengths that could help it maintain its edge in the EV market. For instance, Tesla has a loyal fan base that is willing to pay a premium for its products, superior software, and over-the-air update system that enhances its vehicles’ performance and features, a leading position in battery technology and autonomous driving, and a global presence that allows it to tap into different markets.

The report concludes that the EV market is entering a new phase of intense competition and innovation, where no single player can dominate. It also warns that traditional automakers will face significant challenges in transitioning from their legacy ICE business to their new EV business, such as managing their cash flow, restructuring their operations, retraining their workforce, and retaining their customers. The report advises that the automakers should focus on delivering high-quality products that meet customer expectations and preferences, while also investing in new technologies and capabilities that will give them a competitive edge in the future.