Tesla’s grip on the American electric vehicle (EV) market is loosening, with new data showing its share slipping to levels not seen in nearly eight years. According to figures from Cox Automotive shared with Reuters, the company accounted for 38% of U.S. EV sales in August, the first time it has dropped below 40% since October 2017.
The downward trend became evident in July, when Tesla’s market share fell from 48.7% in June to 42%, its sharpest single-month drop since early 2021. While Tesla still sold over 53,000 vehicles that month, rivals expanded sales by as much as 120% year-over-year.
In August, Tesla sales grew just 3.1%, compared to a 14% increase across the broader EV market, Cox Automotive data showed.
Once dominating more than 80% of the EV market, Tesla now faces intensifying competition from traditional automakers and newer entrants. Brands like Hyundai, Kia, Toyota, and Honda have rolled out new EV models with attractive financing options, zero-interest deals, and aggressive lease incentives. These strategies have helped rivals grow their market share while Tesla’s lineup, centered on the Model 3 and Model Y, shows signs of slowing down, potentially from their age in the market, the influence of CEO Elon Musk’s political activities, or a mix of both.
Instead of introducing new mass-market vehicles, Tesla has shifted much of its focus toward long-term bets on robotaxis and humanoid robots. Analysts say this pivot is risky, especially since the company’s automotive division remains its primary source of revenue.
The last major launch was the Cybertruck in 2023, which failed to replicate the success of the Model 3 sedan or Model Y SUV. A refreshed version of the Model Y has been released, as well as a six-seat version of the electric SUV, but only so far in China, leaving Tesla on track for a possible second consecutive year of declining sales.
