Tesla's share of the US electric car market has fallen to its lowest level since 2017

Tesla's share of the US electric vehicle market fell to 38% in August 2025, the first time it has fallen below 40% since October 2017, Reuters reports, citing a report by Cox Automotive. For comparison, just a few years ago, the company controlled more than 80% of the segment.

Tesla’s share fell from 48.7% to 42% in July, the biggest monthly decline since March 2021. The company’s sales rose 7% to 53,800 vehicles, but the market as a whole gained more than 24%. Tesla’s growth slowed to 3.1% in August, while the market grew 14%.

Analysts attribute the decline to an outdated model range: the latest new product was the 2023 Cybertruck pickup truck, which did not repeat the success of the Model 3 and Model Y. The Model Y update also did not meet expectations, while competitors such as Hyundai, Honda, Kia, Toyota and Volkswagen are actively releasing new models and offering generous discounts and preferential terms.

Elon Musk's company is now focusing on robo-taxis and humanoid robots, delaying or canceling plans for more affordable models, posing risks to its core automotive business, which is still its main source of revenue.

Competitors, meanwhile, are aggressively building their presence: in July, EV sales from Hyundai, Honda, Kia, and Toyota all jumped 60% to 120% thanks to higher incentives for buyers.

The company is also facing a sales slump in Europe, while China's BYD is seeing a 225% increase this year. Against this backdrop, Tesla has proposed a new compensation plan for CEO Elon Musk over 10 years. Its final amount could reach as much as $1 trillion.

Experts predict that increased demand for electric vehicles will persist until the end of September, when the $7,500 federal tax credit expires, after which the market may cool, increasing pressure on Tesla and other manufacturers.