Tesla's (TSLA) U.S. market share has fallen to its lowest level since 2017 as consumers choose other electric vehicle (EV) makers in an increasingly competitive market.
Data from research firm Cox Automotive shows that Tesla, which once held more than 80% of the U.S. electric vehicle market, accounted for only 38% of total sales in the U.S. during August of this year.
It is the first time that Tesla’s share of the U.S. electric vehicle market has been below 40% since October 2017.
The decline highlights the threat from other automakers that are ramping up their electric vehicle incentives as well as a rejection of Tesla CEO Elon Musk’s political activities, say analysts.
Analysts add that the situation for Tesla is likely to worsen as federal tax credits on electric vehicle sales expire at the end of September this year.
Those federal tax credits reduced the cost of a Tesla vehicle by $7,500 U.S. or more.
At the same time, Tesla has turned its focus to building robotaxis and humanoid robots, delaying or cancelling plans for cheaper electric vehicle models.
In a shocking development, Tesla’s board of directors recently proposed an unprecedented $1 trillion U.S. pay package for Musk that is pegged to the company reaching future milestones.
However, despite the behind-the-scenes drama and shifting priorities, Tesla's electric vehicles remain the company’s money maker.
Its last new model was the Cybertruck electric pick-up truck that rolled out in 2023 with nothing of the success of the Model 3 sedan or Model Y SUV.
Tesla has refreshed the Model Y, once the world's best-selling electric vehicle, but the changes failed to live up to expectations, and Tesla is on track toward a second year of sales declines.
Overall sales of new electric vehicles rose more than 24% month-over-month in July to 128,268, according to Cox Automotive.
Tesla’s July sales increased 7% to 53,816, even as its market share fell. The stock of Tesla has declined 8% this year to trade at $350.84 U.S. per share.
