On September 8, market research firm Cox Automotive released new data through Reuters showing that Tesla’s market share in the U.S. electric vehicle market fell to its lowest point in nearly eight years in August. This drop was due to consumers opting for new electric vehicles from competitors, rather than Tesla’s relatively outdated models.
Analysts predict that U.S. electric vehicle sales will continue to grow in September, but sales may decline as federal tax credits expire at the end of the month, adding financial pressure on Tesla and other manufacturers.
Tesla, which once dominated the U.S. electric vehicle market with over 80% of the market share, saw its share drop to just 38% in August. This is the first time it has fallen below 40% since October 2017, when the Model 3 began mass production. While other manufacturers continue to launch new models, Tesla has shifted its focus to Robotaxi and humanoid robots, delaying or canceling plans for more affordable vehicles.
Tesla’s multi-trillion-dollar market value largely depends on this strategy. The board proposed Elon Musk’s unprecedented $1 trillion compensation package last Friday, one of the conditions being that Tesla’s market value must reach $8.5 trillion over the next decade.
Currently, Tesla’s core automotive business remains its primary source of profit. Its latest model, the Cybertruck, was launched in 2023, but it has not performed as well as the Model 3 and Model Y in the market. Although Tesla has updated the Model Y, the changes have not met expectations, and the company is facing a second consecutive year of declining sales.
Stephanie Valdez Streaty, the head of industry insights at Cox, stated, “I know they (Tesla) want to become a robotics and AI company. But as an automaker, without new products, market share will decline.”
More complete data from July shows that Tesla’s market share dropped from 48.7% in June to 42%, marking the largest decline since March 2021. Cox data showed that overall U.S. electric vehicle sales in July grew by 24% month-over-month to 128,268 vehicles, driven by the expiring $7,500 tax credit and promotions. Tesla’s sales rose by 7% to 53,816 vehicles, but its market share declined.
Preliminary data for August indicates that Tesla’s sales growth slowed to 3.1%, while the overall market grew by 14%.
