Tesla’s grip on the U.S. electric vehicle market is slipping, with its share dropping to 38% in August, the lowest level since 2017. The numbers, reported by Reuters, highlight how far the company has fallen from its peak, when it controlled more than 80% of EV sales just a few years ago.
The main driver behind the decline is simple: competition. Automakers like Hyundai, Kia, Toyota, Volkswagen, and Ford are flooding the market with new electric models, often paired with aggressive incentives like zero-percent financing, extended warranties, and free charging plans. These deals are arriving just as the federal $7,500 EV tax credit begins to phase out, nudging consumers toward alternatives that feel like better value.
Tesla’s own lineup hasn’t seen the same momentum it once enjoyed. While the Model 3 and Model Y continue to sell in large numbers, the much-anticipated Cybertruck hasn’t sparked the kind of demand the company hoped for. On top of that, Tesla has slowed the rollout of more affordable vehicles while betting big on longer-term projects such as robotaxis and humanoid robots. Analysts have noted that while those initiatives could pay off one day, they aren’t helping Tesla keep its market share today.
Another challenge comes from shifting consumer sentiment. Some observers suggest that Elon Musk’s outspoken political activity has polarized potential buyers, especially among younger, more progressive consumers who were once drawn to Tesla’s tech-forward image. A recent piece from Investor’s Business Daily pointed out that even with modest sales growth, Tesla is falling behind the broader EV market’s pace, underscoring that the problem isn’t demand for electric cars but demand for Tesla specifically.
Despite these setbacks, Tesla remains the top EV seller in the U.S. by a comfortable margin. But the numbers are a reminder that dominance is no longer guaranteed. As other automakers refine their EV strategies and compete more aggressively on price, Tesla will need to respond—likely with new models at lower price points—if it hopes to maintain leadership in a market it once seemed destined to own outright.
