Tesla’s (NASDAQ:TSLA) dominance in the American electric vehicle market continued to weaken in August, with its share dropping to levels not seen in nearly eight years, according to a Reuters report citing Cox Automotive data.
Figures showed that Tesla represented just 38% of U.S. EV sales last month, falling under the 40% mark for the first time since October 2017. The decline came as traditional automakers accelerated their push into the EV segment, offering aggressive incentives that spurred strong gains in sales. Hyundai, Kia, Toyota, and Honda collectively saw increases of up to 120% in July, underscoring the pressure Tesla faces from its rivals.
Stephanie Valdez Streaty, director of industry insights at Cox Automotive, told Reuters: “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.”
Tesla’s most recent major launch was the Cybertruck in 2023, which struggled to generate the widespread appeal of its Model 3 sedan or Model Y SUV. Even a refresh of the Model Y earlier this year failed to deliver the momentum many investors had hoped for, leaving Tesla on track for a second consecutive year of sliding sales.
Analysts noted that the competitive landscape is being reshaped not only by fresh product offerings but also by heavy discounts and the impending expiration of U.S. federal EV tax credits at the end of September. These factors are expected to keep demand elevated for non-Tesla models in the near term.
Reuters pointed out that Tesla’s U.S. market share once reached as high as 80%, but that dominance has steadily eroded as competitors broaden their EV portfolios. While Tesla’s sales in August still managed to grow by 3.1%, overall electric vehicle sales in the U.S. climbed 14% during the same period — highlighting the company’s relative underperformance.
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