Is Tesla a Monopoly?

Tesla has largely established itself as synonymous with the electric vehicle (EV) market, exerting considerable control over the industry in what has amounted to a monopoly. However, where Tesla used to be the #1 producer of EVs in 2018, their share in new US electric car sales has been shrinking, from over 60% in 2020 to 45% in 2023. Tesla has a wavering market dominance in the U.S., let alone internationally – counting both battery (BEV) and plug-in hybrids (PHEV), BYD has already overtaken Tesla as the world’s best-selling EV company in 2022. Global competition is only expected to intensify in the coming years. So how can a company whose market share is dwindling be called a monopoly? In reality, the real monopolization does not lie within the vehicle sales but the entire manufacturing sphere through its vertically integrated business model.

Vertical integration involves the acquisition of various production stages in the supply chain, either upstream or downstream from its fundamental market product (Corporate Finance Institute). Tesla’s expansion upstream includes securing exclusive deals with battery makers, mining and processing lithium, nickel, and cobalt. The company obtains downstream dominance through Tesla-only repair and maintenance (i.e. Tesla makers cannot go to a non-dealer specific center, such as Pep Boys or O’Reilly Auto Parts). This creates a cradle-to-grave monopoly under the auspice of an ‘all-inclusive’ experience for Tesla buyers. Citing limits on ease and autonomy, owners initiated a class-action suit for the Right to Repair – asserting that Tesla coerced them into paying high prices and suffering long waits to have their vehicles fixed, under fear of losing warranty coverage. After an initial dismissal and amended refiling, U.S. District Judge Trina Thompson in San Francisco ruled in favor of the plaintiffs. The exact implications for Tesla are unclear.

Tesla’s service repair mandate, though monopolistic, is, to a certain extent, a situation that customers voluntarily opted into when they purchased the vehicle. However, Tesla charging networks were imposed upon non-Tesla EV owners and biased against them by precluding access to Superchargers, the most widely available fast-speed EV charging network in America. Imagine a world where just one company owns the oil for every gas station – Tesla’s charging station dominance is today’s equivalent, except at that time Standard Oil’s dominance led to their eventual breakup in 1911. Unlike gas stations, where any driver can refuel regardless of their car's brand, Supercharging requires Tesla's approval. Tesla’s charging stations are incompatible with other manufacturers’ vehicles unless specific adapters are used and the cars are in direct cooperation with Tesla’s software systems. The company cited their reluctance to open its Supercharger network to other automakers as needing more safety standards and operational protocols to proceed. This creates a situation where non-Tesla EV owners are locked out of the most convenient charging network available for long-distance travel, limiting the range of consumer choice for purchasing an EV. Moreover, if Tesla users ever wanted to use another fast charger available, it requires an adapter, and accusations have surfaced of Tesla’s maps directing users to Superchargers located further away rather than to other fast charging stations more directly en-route.

Through the National EV Infrastructure grant as part of Biden’s Inflation Reduction Act, Tesla was privileged to leverage their lead in the direction and expansion of EV technology from coast to coast. Tesla’s unfettered system growth and subsidized infrastructure – on the condition they allow access to non-Tesla EV users – has helped push forward the country’s largest supported expansion of a charging network. However, this has happened under Tesla’s charger – dubbed the North American Charging Standard (NACS). As such, all other non-Tesla EV manufacturers and users have been forced to adapt to Tesla’s charging network for its 2025 models and beyond and incur the associated costs, or risk obsolescence – despite the Combined Charging Standard (CCS) port standardization across Europe and Asia, as well their faster charging speed. 

Trump’s reversal of the National EV Infrastructure grant creates an uncertain future for this expansion, thus truncating the primary benefit of swapping subsidized expansion for accessibility of Superchargers to non-Tesla EV users. Moreover, the informal agreement did not require that Tesla provide equal access – Tesla’s control over charging stations is widely seen as a way to undercut competitors using price discrimination and creating a Supercharge Membership that non-Tesla EV users must pay for in order to receive the ‘same’ price as Tesla vehicle owners. Tesla’s regulatory capture lobbying and implementing predatory pricing creates a foreboding outlook for future tech-government partnerships acting as an oligarchy. This move further cements Tesla as an inescapable, extractive, harmful provider of charging infrastructure for all EVs.

Tesla should be prepared to face antitrust litigation in light of their EV charging price discrimination under the Sherman Act. This act prohibits monopolization and anti-competitive behavior, much like how it was used to break up Standard Oil in 1911 for its control over oil extraction, refining, distribution, and retail, allowing it to undercut competitors and dictate market prices. If history is any indication, and regulators determine that Tesla’s vertical integration unfairly locks consumers into its ecosystem, the company could face legal pressure as its grip on EV infrastructure tightens. This practice, which exceeds capturing value throughout the supply chain, hinders competition and harms consumers. While many object to monopolies on moral grounds or more trivial impacts on consumers, such as a lack of product variety, Tesla  unequivocally meets the more rigorous standard introduced by Chief Justice Edward White in the 1911 decision against Standard Oil – the “rule of reason” (Yergin 2009, pp. 109). The judicial evaluation of restraint of trade under the Sherman Act should be based upon reason, that “restraint” would be subject to penalty only if it was unreasonable and worked against the public interest. Given that Tesla’s current practices are working against the public interest, in charging and repair in particular, restraint of such behavior within those spheres would conversely serve the public interest.

It remains to be seen whether Tesla will be subject to an antitrust breakup like Standard Oil, especially given Elon Musk’s official leadership position as a presidential advisor and his authoritarian decrees in the Department of Government Efficiency (DOGE) despite having no official endowed decision-making power in the current administration. Tesla’s current trajectory raises fundamental questions about consumer rights, monopolizing new technology, and the role of regulatory intervention in emerging markets.

Margo Donohue is a junior concentrating in International and Public Affairs (POL/GOV) and Environmental Studies (Inequality). She can be contacted at margo_donohue@brown.edu.