Competition is kicking in fast for Tesla Inc. (TSLA), the current electric vehicle (EV) market leader, and it may not be able to sustain its lead role for long. A forecast based on a report by PA Consulting Group claims that the German car makers like Daimler AG, BMW AG and Volkswagen AG are set to surpass their American competitor by the year 2021, reports Bloomberg. (See also: Who Are Tesla's Main Competitors?)

The consulting firm ranks the global EV manufacturers based on several factors that include battery technology, business strategy, supplier networks, strategic partnerships, organizational culture and financial performance. The factor-based methodology leads to an overall score that is used to rank the electric auto manufacturing companies for the next couple of years.

As per the latest rankings, Tesla is expected to retain the existing top rank till 2019. However, over the next two years, Tesla will fall back to the seventh rank and Daimler is expected to take the top slot, the study forecasts.

Tesla May Lose Out in a Flooded EV Market

For 2019, the other names in the list include the Renault–Nissan–Mitsubishi Alliance at No. 2, followed by BMW, Hyundai/Kia (the Hyundai Motor Group), Daimler, Volvo and finally Volkswagen at No. 7. By 2021, BMW is expected to move to No. 2, followed by the Renault–Nissan–Mitsubishi Alliance, Volkswagen, Volvo and a new entrant, Toyota, at No. 6. South Korea's Hyundai/Kia does not figure in the list of top seven for 2021.

While automakers like BMW, Volvo, Volkswagen, and the Renault–Nissan–Mitsubishi Alliance are expected to maintain about similar rankings between 2019 and 2021, the fortunes of Tesla are predicted to change in a big way.

As more and more global carmakers are investing big in greener electric car projects, the market is expected to be flooded with a variety of models. While Tesla currently enjoys a near monopoly with its electric cars, it is set to face stiff competition from a diversified portfolio of offerings from various leading carmakers. In particular, companies from Germany, which is known for its established track record of auto manufacturing, are expected to benefit from favorable policies. Earlier this week, German Prime Minister Angela Merkel and Chinese Prime Minister Li Keqiang met to sign an agreement that will bring a Chinese CATL battery factory to the German city of Erfurt. The study also factored in the recently reported production challenges faced by the Palo Alto, California-based Tesla for its new Model 3. (See also: How Tesla Could Lose the Electric Car Race?)

“Achieving CO2 targets and improving e-mobility performance go hand in hand,” said Thomas Göttle, head of PA Consulting’s automotive business, in a statement. “For the manufacturers, however, this also involves great need for action in terms of organization and personnel.” (See also: How Big Automakers Will Speed Past Tesla?)