Tesla’s U.S. Market Share Falls Below 40% in August, Lowest Since 2017

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According to Cox Automotive data, Tesla’s share of total U.S. electric vehicle sales fell to 38% in August, its lowest level since October 2017.

The decline in Tesla’s market share is driven by two main factors. First, competition in the EV market has intensified, with Chinese companies such as BYD catching up rapidly. BYD has already overtaken Tesla as the global leader in new energy vehicle sales.

Second, policy changes are weighing on demand, as EV tax credit incentives are expected to expire by the end of September, posing a major headwind for sales.

Tesla’s aging product lineup is also an undeniable issue. Since the launch of the Cybertruck in 2023, the company has not introduced any new models that can replicate the success of the Model 3 or Model Y.

Stephanie Valdez Streaty, Director of Industry Insights at Cox Automotive, said in an interview: “I know they are positioning themselves as a robotics and AI company. But when you are an automaker without new products, your share will inevitably decline.”

Meanwhile, rivals are gaining ground. Traditional automakers such as Hyundai, Honda, Kia, and Toyota are offering more generous purchase incentives than Tesla, fueling EV sales growth of between 60% and 120%, which has boosted their market share.

Musk’s previous role in government efficiency initiatives and his outspoken political positions have also alienated some loyal Tesla supporters.

Slowing growth has forced Tesla into a difficult dilemma: whether to continue relying on margin-eroding price cuts and incentives to support sales, or to sacrifice market share in order to preserve profitability. This strategic crossroads is increasingly worrying investors.