Tesla is no longer the unstoppable force it once was in the American EV market. The company, which used to dominate more than 80% of sales, has now fallen to 38% in August, according to Cox Automotive figures reported by Reuters. It’s the first time Tesla has dipped below 40% in nearly eight years. While the numbers alone are striking, they also point to something bigger: buyers are losing patience with an aging lineup and turning to fresher, better alternatives.
Oh, How The Mighty Have Fallen
Tesla
Tesla practically built the modern EV market. For years, it held a majority share and made terms like ‘EV’ household names. Cox’s data shows that grip started to weaken this year. Tesla slipped to 48.7% in June, dropped further to 42% in July, and then tumbled to 38% in August — the sharpest two-month decline since 2021. Globally, the trend is similar. Sales fell 1% in 2024 and are already down 10% this year. In Europe, Tesla’s decline has reached 40%, despite its overall EV sales increasing by 48%. Adding insult to injury, global EV sales are at an all-time high, yet even in China, the largest EV market in the world, Tesla sales fell 6%.
Incentives and Fresh Faces
Lucid Motors
Competition in the EV space is fierce, and rivals are leaning heavily on incentives. Cox notes that Hyundai, Kia, Honda, and Toyota boosted EV sales by as much as 120% this summer with lease deals that Tesla simply didn’t match. Volkswagen’s ID.4, for example, saw sales climb more than 450% in July, thanks to bargain leases and perks like free charging. But with the $7,500 tax credit coming to an end this month, it’s speculated that EV sales will decrease, creating even more tension among competitors. On top of that, with Tesla growing stagnant, it opens the window for other U.S. rivals like Lucid to enter the market.
Tesla Fatigue
Tesla
Whether you want to admit it or not, Tesla isn’t what it once was. The brand that used to be synonymous with innovation has fallen behind, especially when compared with exciting models from competitors, like the Hyundai Inioq 5N. The last new Tesla model, the Cybertruck, came out in 2023. Although it had people talking, it never got the masses to open their wallets like they did with the Model 3 or Model Y. Due to non-stop quality control issues, too diverse a portfolio, and Elon Musk’s increasingly polarizing image, it’s easy to see why some shoppers are walking away.
