Tesla's market share in the US has dropped to an eight-year low as buyers opted for electric cars that weren't from the stable of Elon Musk, Reuters reports.
The company run by the world's richest person accounted for 38 percent of the total EV sales in the US in August 2025, slipping below the 40 percent mark for the first time since October 2017, when it was ramping up production of the Model 3—its first mass-market electric car.
Tesla's market share fell to 42 percent in July from 48.7 percent in June, in the sharpest drop since March 2021.
The decline in Tesla's car sales underscores the threat from electric carmakers ramping up sales before EV tax credits expire by the end of September.
To be sure, while other automakers are rolling out new electric cars, Tesla has turned its focus to robotaxis and humanoid robots, delaying and cancelling plans for cheaper electric cars.
Still, much of Tesla's trillion-dollar valuation hangs on that bet.
On Friday, Tesla's board of directors proposed an unprecedented $1 trillion pay package for Elon Musk that, apart from other operational milestones, is pegged to Tesla's market cap rising to $8.5 trillion over the next decade.
For now, Tesla's core auto business remains its money maker. Its last new model was the Cybertruck that rolled out in 2023 with nothing of the success of the Model 3 sedan or Model Y SUV. Tesla has refreshed the Model Y, once the world's best-selling car, but the changes failed to live up to expectations.
Now, Tesla is on track for a second straight year of sales decline.
“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,” Stephanie Valdez Streaty, Cox's director of industry insights, said in an interview with Reuters.
Musk's right-wing political work and association with US President Donald Trump also has hurt the brand. Musk helped guide Trump's efforts this year to downsize and reshape the US government but left the administration in May and had a falling out with the Republican president.
EV sales in the US rose more than 24 percent month-on-month in July to 128,268 units, according to the Cox data, driven by the looming end of a $7,500 tax credit for EVs and attractive deals.
Tesla saw sales rise 7 percent to 53,816, even as its market share fell. In August, Tesla's growth slowed to 3.1 percent, and the broader market grew by 14 percent, the preliminary data showed.
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