It’s the first time that Tesla’s US EV market share has fallen below the 40 per cent mark since October 2017, when production of the mass-market Model 3 first began. In July, its market share fell from 48.7 per cent to 42 per cent, with this seemingly diminishing further to the 38 per cent mark in August.
According to research data shared by Cox Automotive with Reuters, consumers are increasingly turning to Tesla’s competitors when purchasing an EV. Much of these claims are based on more comprehensive data from June – July plus preliminary data from August. In July, Hyundai, Honda, Kia, and Toyota reportedly drove EV sales higher by 60% to 120% thanks to a range of higher incentives than Tesla. Similarly, VW sales rose over 450 per cent in July compared to the previous month, with Reuters citing “attractive” lease prices and offers such as free fast charging.
Overall, sales of new EVs in the US increased 24 per cent month over month to 128,268 – motivated by the looming end of the $7500 federal tax credit. Tesla meanwhile saw its sales rise 7 per cent in July, with the preliminary data suggesting this slowed further to 3.1 per cent in August even while the market itself grew 14 per cent. It means Tesla could now be on track for a second year of declining sales.
Some have highlighted the lack of new BEVs being released by Tesla. The company hasn’t launched a new model since 2023 with the Cybertruck. Despite refreshing the Model Y, the company has since been unable to boost its sales growth.
Stephanie Valdez Streaty, Cox’s director of industry insights, told Reuters she attributes this partially to Tesla’s increasing focus on non-EV products: building robotaxis and Optimus robots while delaying or cancelling plans for cheaper EVs. Streaty said: “I know they’re positioning themselves as a robotics, AI company. But when you’re a car company, when you don’t have new products, your share will start to decline.” She added that legacy automakers are becoming increasingly competitive due to a ‘sense of urgency’ from the October deadline for the EV federal tax credit.
All of this could prove stark reading for CEO Elon Musk and Tesla’s board of directors, which this week floated a $1 trillion share compensation package for Musk if key valuation and production milestones are met. If Tesla hits these milestones, which include everything from increasing market share to mass producing robotaxis and Optimus robots, it would hand Musk up to 12 per cent of Tesla stock. This rests on Tesla’s valuation increasing by $7.5 trillion to $8.6 trillion – nearly eight times its current valuation.