Tesla's U.S. market share tumbles to 2017 lows
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Tesla's U.S. market share dropped below 40% in August for the first time since 2017, as its aging lineup of electric vehicles faced new competition from General Motors, Ford, Hyundai and others.
Why it matters: It was always expected that Tesla's grip on the EV market would loosen as more plug-in models hit showrooms, but the trend has accelerated as CEO Elon Musk has been shifting his focus toward AI and robotaxis.
Driving the news: Tesla, which once accounted for 80% of EV sales in the U.S., saw that share shrink to about 38% in August, according to preliminary data from Cox Automotive, as first reported by Reuters.
The big picture: Tesla's limited lineup, now looking stale despite frequent software updates, is likely one source of the decline, analysts say.
- Most of its sales come from just two models, the 3 sedan and the Y crosover, the latter of which just received a modest refresh.
- Meanwhile, GM has risen to the No. 2 spot in EV sales, with a broad lineup of electric models selling under the Chevrolet and Cadillac brands.
- In the first seven months of the year, GM more than doubled its EV sales compared to 2024.
What they're saying: "The one constant in the automotive business is that fresh product sells well," Stephanie Valdez Streaty, Cox's director of industry insights, tells Axios.
- "While Tesla's Model Y update has slowed the company's sales decline, it's not getting easier for the EV pioneer because the market is now flooded with all-new, fresh EVs from mainstream competitors — consumers have more choice than ever," she said.
Zoom out: Cox is expecting record EV sales in the U.S. for the quarter ending Sept. 30, ahead of the expiration of federal tax incentives.
- The surge, says Streaty, is being driven by "product innovation, motivated dealers, and an urgency ahead of the IRA tax credit phase-out."
The intrigue: Many carmakers are starting to run low on EV inventory, which could help Tesla recover some of its lost market share, at least temporarily.
- Tesla plans to launch a stripped-down Model Y crossover in the fourth quarter, potentially eliminating features like the glass roof, replacing vegan seats with cloth seats and using a smaller, cheaper battery.
What to watch: Tesla doesn't have many new products in the pipeline, and instead expects to generate as much as 80% of its future revenue from Optimus robots and robotaxis.
- "Elon has reached peak Tesla sales and he knows it," Karl Brauer, executive analyst at iSeeCars, told Automotive News. "I predict minimal investment in his current product except in the area of self-driving tech."
The bottom line: Musk ushered in the EV era, and now that the rest of the industry has caught up, he's turning his attention elsewhere.
Disclosure: Cox Automotive, like Axios, is owned by Cox Enterprises.
