Tesla is losing the US: less than 40% of the electric car market

Tesla is going through a difficult time. Sales have been declining for the second year in a row, and the company’s share of the US electric car market has fallen to its lowest level in almost 8 years — less than 40%. The main reason is simple: today, buyers have a huge selection of electric cars, most of which are newer and more modern than Tesla’s current lineup.

By data analytical company Cox Automotive, in August, Tesla’s share of the US market was 38% of all electric vehicles sold. The last time the figure dropped below 40% was in October 2017, when Tesla was just ramping up production of its first mass-market Model 3.

The data also shows that from June to July 2025, Tesla lost market share even faster: from 48.7% to 42%. This is the largest monthly drop since March 2021, when Ford launched the electric Mustang Mach-E.

In total Tesla sales have been steadily declining recently. In 2024, the company sold about 1.79 million vehicles, compared to 1.81 million in 2023. This was the first annual decline since 2011. Production declined even more markedly, by almost 4% in 2024 compared to 2023.

It looks like 2025 will be the second year in a row with a decline in sales. У second quarter Tesla shipped 384,122 vehicles, down 13.5% from 443,956 in the same period a year earlier. The situation is particularly difficult for the Cybertruck pickup truck.

Other factors also played a role in Tesla’s problems. For example, Elon Musk’s former close relationship with Donald Trump and his work as head of the government agency DOGE, which was involved in cost cutting, scared off some buyers, especially in Europe.

But the main pressure comes from competitors Rivian and other American automakers are actively competing with Tesla at home, while Chinese companies led by BYD are showing great success in both China and Europe. In August, Tesla’s sales in China fell by 9.9% year-on-year, and since the beginning of the year, the overall decline is about 7% compared to 2024.

In addition to electric vehicles, Tesla spends resources on robots and robocall — areas that most competitors don’t even try to focus on Updated version of the Model Y, which the company recently released, also failed to bring tangible success.

Nevertheless, Tesla still showed some growth in July compared to the previous month. Sales rose 7% to 53,816 vehicles. But overall, the market for new electric vehicles grew much faster, by more than 24% month-on-month. Many buyers were in a hurry to take advantage of the $7,500 tax rebate. At the same time, Tesla’s competitors increased their sales by 60% to 120%. So, even with a 7% increase in sales, while the market grew by 24%, Tesla lost its share.

Tesla shares are now showing a slight increase. However, this is not due to sales, but to a new compensation plan for Musk. It could reach $1 trillion and is intended to keep the founder focused on the company. A shareholder vote on the package is scheduled for November 6.

Source: techspot