Tesla’s US market share falls to its lowest level since 2017 as Elon Musk shifts focus to robotaxis

Tesla’s Market Share Hits Low in August

Tesla’s market share in the U.S. dropped to the lowest level in nearly eight years this August, as data from Cox Automotive indicates, which was shared only with Reuters.

This decrease highlights the rising competition from other automakers who are ramping up incentives for electric vehicles (EVs) during a challenging period for the industry. Analysts predict that the surge in EV sales will carry through September, but then it may decline sharply when the federal tax credit expires at the end of the month, putting additional financial strain on Tesla and its competitors.

Once holding over 80% of the U.S. EV market, Tesla accounted for just 38% of total EV sales in August. This figure has remained below 40% since October 2017, which was when the Model 3 ramped up production, according to preliminary data from Cox.

While other automakers are introducing new EV options, Tesla seems to be concentrating on developing Robotaxis and humanoid robots, putting off plans for more affordable electric vehicles and, in some cases, scrapping them altogether.

A significant portion of Tesla’s valuation, which stands at a trillion dollars, hinges on these strategies. Alongside other operational goals, the company’s board proposed a remarkable $1 trillion compensation package tied to an expansion of Tesla’s value to $8.5 trillion within the next decade.

For now, Tesla’s primary automotive business continues to generate substantial revenue. However, its last new model—the Cybertruck—was released in 2023, while the Model 3 Sedan and Model Y SUV haven’t performed particularly well. Although Tesla refreshed the Model Y, which was once the best-selling car globally, the updates fell short of expectations.

“They’re positioning themselves as robotics and AI companies. But for an automotive company, without new products, your market share starts to dwindle,” said Stephanie Valdes Streety, Cox’s industry insights director, in an interview with Reuters.

Complete data from July shows that Tesla’s market share fell from 48.7% in June to 42%. This drop represents the steepest decline since March 2021, coinciding with Ford’s launch of the Mustang Mach-E EV.

Musk’s political engagements, particularly his ties with the right-wing and former President Trump, are also said to be impacting the brand negatively. Musk initially supported efforts to reduce government power this year but distanced himself from the Trump administration in May.

Sales of new EVs increased by over 24% in July, driven by the impending conclusion of the $7,500 tax credit and attractive deals. Despite the declining market share, Tesla managed a 7% increase in sales, totaling 53,816 units.

In August, growth for Tesla slowed to 3.1%, while the overall market climbed by 14%, according to preliminary figures.

The competition in the EV market is becoming increasingly intense.

Last month, while looking for a new car in the San Francisco Bay Area, 41-year-old tech professional Topojoy Biswas encountered various enticing offers from EV dealers, including options with no down payment and zero interest rates.

Opting for the Volkswagen ID.4 instead of the Toyota Camry he originally considered, Biswas experienced the drastic changes in the market firsthand, with Volkswagen seeing over a 450% increase in sales from the previous month in July.