Tesla’s grip on the U.S. EV market is slipping as rivals launch new models and offer aggressive incentives to buyers. According to new data, Tesla’s market share has dropped to its lowest point since 2017, when both Elon Musk and his car company were far less well known than they are today.
Reuters reports that Elon Musk’s Tesla, once the dominant force in the U.S. EV market with over 80 percent market share, has suffered a market share erosion in recent months. According to exclusive data from research firm Cox Automotive, Tesla’s U.S. market share fell to just 38 percent in August 2025, the lowest level since October 2017 when the company was ramping up production of its first mass-market car, the Model 3.
The decline in Tesla’s market share highlights the growing threat from traditional automakers who are investing heavily in EVs and offering attractive deals to lure buyers. What’s worse for Musk, the latest numbers are a continuation of a negative trend of the past few months. In July, Tesla’s market share dropped to 42 percent from 48.7 percent in June, marking the sharpest decline since March 2021 when Ford launched its Mustang Mach-E electric SUV.
While Tesla sales rose seven percent in July to 53,816 vehicles, the overall EV market jumped more than 24 percent month-over-month to 128,268 units, driven by the impending expiration of a $7,500 federal tax credit and competitive offers from rivals. In August, Tesla’s growth slowed further to just 3.1 percent while the broader market expanded by 14 percent.
The increasingly competitive landscape is forcing Tesla to make difficult choices between supporting sales with profit-destroying incentives or maintaining margins while ceding market share. Tesla has had to cut prices in recent years to boost demand, putting pressure on its industry-leading profitability.
Tesla’s sales problems extend far beyond America. Breitbart News previously reported that the company has suffered a 40 percent sales decline in Europe:
Elon Musk’s Tesla has suffered a 40 percent plunge in sales in Europe for the month of July compared to the same period last year, according to data released by the European Automobile Manufacturers Association (ACEA) on Thursday. The company recorded only 8,837 new car registrations in Europe last month, marking its seventh consecutive month of declining sales in the region.
In stark contrast, Chinese rival BYD has enjoyed a surge in its European sales, with new car registrations jumping by 225 percent year-on-year to reach 13,503 in July. This impressive growth comes as BYD continues to expand its presence in Europe, opening new showrooms and launching competitively priced models over the past two years.
Tesla’s aging vehicle lineup is also contributing to its market share losses. The company’s last new model was the Cybertruck pickup which launched in 2023 but failed to replicate the success of its mass-market Model 3 sedan and Model Y SUV. A recent refresh of the Model Y, once the world’s best-selling car, disappointed and Tesla appears headed for a second straight year of sales declines.
Meanwhile, Tesla CEO Elon Musk has shifted his focus to ambitious projects like building robotaxis and humanoid robots rather than developing new, more affordable EVs. Much of Tesla’s lofty valuation is tied to the success of those moonshot ventures. Tesla’s board recently proposed an unprecedented $1 trillion pay package for Musk, contingent on the company’s value rising to $8.5 trillion over the next decade.
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