A Tesla Cybertruck is parked in entrance of a showroom in Austin, Texas, on March 20, 2025.
Brandon Bell | Getty Images
Tesla’s U.S. market share dropped to a close to eight-year low in August as patrons selected electrical automobiles from a rising steady of rivals over the growing old lineup supplied by CEO Elon Musk’s firm, in accordance to information from analysis agency Cox Automotive shared solely with Reuters.
The decline highlights the menace from automakers ramping up EV incentives at a tough time for the trade. Analysts anticipate an EV gross sales bump to proceed by means of September in the United States, then drop when federal tax credit expire on the finish of the month, elevating monetary strain on Tesla and different automakers.
Tesla, which as soon as held greater than 80% of the U.S. EV market, accounted for 38% of the overall EV gross sales in the United States in August, the primary time it has fallen beneath the 40% mark since October 2017, when it was ramping up manufacturing of the Model 3, its first mass market automobile, in accordance to early information from Cox.
While different automakers are rolling out new EVs, Tesla has turned its focus to constructing robotaxis and humanoid robots, delaying and cancelling plans for cheaper electrical automobile fashions.
Much of Tesla’s trillion-dollar valuation hangs on that guess. The firm’s board on Friday proposed an unprecedented $1 trillion pay package for Musk that, aside from different operational milestones, is pegged to Tesla’s worth rising to $8.5 trillion over the subsequent decade.
For now, Tesla’s core auto enterprise stays its cash maker. Its final new mannequin was the Cybertruck pickup that rolled out in 2023 with nothing of the success of its Model 3 midsize sedan or Model Y midsize SUV. Tesla has refreshed the Model Y, as soon as the world’s best-selling automobile, however the modifications failed to dwell up to expectations, and Tesla is on monitor towards a second 12 months of gross sales decline.
“I know they’re positioning themselves as a robotics, AI company. But when you’re a car company, when you don’t have new products, your share will start to decline,” Stephanie Valdez Streaty, Cox’s director of trade insights, stated in an interview with Reuters.
Cox has extra full information for July, when Tesla’s market share fell to 42% from 48.7% in June. The drop was the sharpest since March 2021, across the time when Ford launched its Mustang Mach-E EV, in accordance to a Reuters evaluation of the information.
U.S. President Donald Trump and Elon Musk attend a press occasion in the Oval Office of the White House in Washington, D.C., U.S., May 30, 2025.
Nathan Howard | Reuters
Musk’s right-wing political work and affiliation with President Donald Trump additionally has damage the model. Musk helped information Trump’s efforts this 12 months to downsize and reshape the U.S. authorities however left the administration in May and had a falling out with the Republican president.
Sales of recent EVs jumped greater than 24% month over month in July to 128,268, in accordance to the Cox information, pushed by the looming finish of a $7,500 tax credit score for EVs and enticing offers. Tesla noticed gross sales rise 7% to 53,816, whilst its market share fell.
In August, Tesla’s progress slowed to 3.1%, and the broader market grew by 14%, the preliminary information confirmed.
‘Attractive choices’
For years, Tesla because the market chief was ready to improve gross sales quickly and command a premium value for its automobiles, permitting it to rake in income. But with weakening gross sales and a bunch of rivals, Tesla has had to lower costs in current years, squeezing its margins and worrying buyers.
The falling share reveals Tesla’s more and more tough selection of supporting gross sales utilizing increased, profit-destroying incentives for patrons or sustaining income and giving up market share.
The July information confirmed rivals outgrowing Tesla. Hyundai, Honda, Kia and Toyota 7203.T rolled out increased incentives than Tesla and drove up EV gross sales between 60% and 120%, boosting market share.
“These legacy manufacturers are all benefiting from this sense of urgency, and they’re able to have attractive offerings for their vehicles – and it’s working,” Streaty stated. “I think we’re going to continue to see this momentum through September.”
Competition towards Tesla has turned fierce at EV vendor tons.
While scouring for a automobile for on a regular basis use final month, Topojoy Biswas, a 41-year-old tech employee in the San Francisco Bay space, was greeted with a spread of offers, together with zero down cost and 0 rates of interest, from numerous EV sellers.
Instead of the Toyota Camry he initially was eyeing, Biswas purchased a Volkswagen ID.4, VW’s competitors to the Model Y, lured by a gorgeous lease value and a suggestion of free fast-charging. Volkswagen gross sales rose greater than 450% in July from the earlier month.
“It felt like the deal of the market,” Biswas stated.