Tesla is still the king of EVs - but rivals will catch up fast, Wall Street analysts say

• Tesla is by far the world's favorite EV brand, according to a new survey from UBS.
• A quarter of those surveyed said a Tesla would be their top pick for an electric car.
• But there's reason to think that other companies will start closing the gap soon.

Tesla has been the dominant player in electric vehicles - and the most trusted brand in the space - for years. But rivals will start closing in soon, a new report from UBS published Tuesday suggests.

Elon Musk's automaker is by far the favorite among buyers who would consider buying an EV, according to the bank's survey of 11,380 people in the world's biggest electric-car markets. Among those surveyed, 43% would consider buying an EV from Tesla. BMW was the next most favored brand at 31%.

A quarter of respondents said a Tesla would be their top choice, blowing every other brand out of the water. BMW came in second with 9% of the vote, while Toyota snagged third with 7%. UBS also found that consumers consider Tesla to be the global leader in EV technology by a wide margin.

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However, UBS analysts said, Tesla's lead over other carmakers has stopped growing, and legacy OEMs are poised to start closing the gap as they double down on electrification.

"Tesla remains the most favored BEV brand globally and the technology leader in the eyes of consumers, the survey shows," the analysts said. "However, the German premium incumbent brands Audi, Mercedes and BMW, are still preferred vs. Tesla in a face-to-face competition, and in light of their EV product offensives this year, we expect the positive trend to accelerate."

Given big electric pushes from Volkswagen, General Motors, Ford, and Hyundai, UBS expects Tesla's lead to shrink as time goes on. Going beyond consumer sentiment, Tesla's lead in technology has become less pronounced, too, UBS said. Recent EV launches show that traditional automakers can build EVs that are on par with Tesla's range, charging, and value.

"We take this as hard evidence that legacy OEMs and also Chinese EV pure-plays are narrowing or even closing the gap vs. Tesla in what defines an attractive EV," the analysts said.

Car companies have piled into the EV market in recent years, many of them pledging to put tens of billions toward their electric initiatives. And plenty of non-Tesla EVs have gotten a great reception from the public. The Ford F-150 Lightning, the battery-powered version of Ford's popular truck, scored more than 100,000 non-binding preorders within weeks of its debut, for instance.

The survey also found that interest in EVs globally is growing fast, with 43% of consumers now likely to consider buying an electric car, up 6% from 2020. In the US, that figure has jumped 15% in the last year to 37%.