Tesla, the electric vehicle manufacturer led by CEO Elon Musk, has received yet another round of discouraging news as its position in the U.S. market shows signs of weakening. According to fresh data compiled by research firm Cox Automotive and reported by Reuters, Tesla accounted for only 38% of all electric vehicle sales in the United States during the most recent month. While that percentage still represents a significant share of the market, the decline carries symbolic weight: it marks the very first time since October 2017 that Tesla’s market share has dipped below the 40% threshold, a milestone that underscores increasing pressure from competitors and shifting dynamics in the rapidly expanding EV sector.
When Business Insider reached out for clarification, neither Cox Automotive nor Tesla offered immediate comment, leaving Cox’s published figures to speak for themselves. The report further contextualizes Tesla’s current struggles by noting that, at its peak, the company once commanded more than 80% of the U.S. EV market — an extraordinary dominance that demonstrated both Tesla’s early lead in electric mobility and the relatively slow adoption of battery-powered cars by other automakers at the time. Yet in recent months, those historical advantages have become less pronounced, as rivals have begun to close the gap with a flood of new models, more competitive pricing, and improvements in technology that erode Tesla’s longstanding edge.
These shifting trends arrive on top of Tesla’s broader financial hurdles. In its most recent quarterly earnings release, the company fell short of Wall Street expectations on the twin fronts of vehicle deliveries and overall revenue generation. The financial report recorded Tesla’s steepest year-over-year revenue decline in the last ten years, a sobering reminder of the magnitude of the headwinds it currently faces. Tesla itself attributed the disappointing results to a combination of macroeconomic and regulatory conditions. Specifically, the company cited ongoing global uncertainty, including potential disruptions from changing tariffs, ambiguity surrounding future fiscal policies, and fluctuating political attitudes toward clean-energy incentives. Such factors, Tesla argued, have created a clouded environment for both manufacturers and consumers, leading to unpredictable demand patterns.
Adding to these concerns, Elon Musk has publicly acknowledged the possibility that Tesla may encounter several challenging quarters in the near term. He highlighted in particular the looming end of the federal EV tax credit, scheduled to expire at the close of September, which could weaken consumer demand by raising effective purchase costs. Simultaneously, Musk pointed to the broader regulatory climate, which remains unsettled and may continue to influence purchasing decisions as both governments and consumers reassess their commitments to electric mobility.
Despite these setbacks, Tesla’s board of directors recently advanced a bold and highly controversial proposal: a compensation package for Musk valued at an extraordinary $1 trillion, the largest of its kind ever put forward in corporate history. This dramatic proposal arrives at the same time as Tesla increasingly positions itself not solely as an automotive manufacturer but as a pioneering entity in artificial intelligence and robotics. Illustrating this strategic pivot, Tesla recently unveiled its fourth long-term strategic roadmap, commonly referred to as a “Master Plan.” Shortly thereafter, Musk emphasized on social media that he believes approximately 80% of Tesla’s eventual value will derive not from its vehicle business but from its humanoid robot project, known as Optimus.
Industry analysts, however, remain divided on this ambitious repositioning. Stephanie Valdez Streaty, director of industry insights at Cox Automotive, expressed skepticism in comments to Reuters. She observed that while Tesla appears determined to brand itself as a robotics and AI-focused company, such diversification cannot obscure the reality of its current status as an automaker. In her view, neglecting the steady introduction of new vehicle models risks eroding the very foundation of Tesla’s market presence. Without fresh automotive products to stimulate consumer enthusiasm and sustain growth, she warned, the company’s market share will naturally continue to decline, regardless of its parallel ambitions in robotics and artificial intelligence.
Taken together, these developments point to a moment of profound transition for Tesla. What was once a near-monopoly in the EV landscape has become a much more competitive environment, shaped both by internal challenges and external forces. While Tesla maintains significant influence and visibility, the company’s future trajectory will depend heavily on its ability to balance its legacy as an innovator in electric vehicles with its aspirations to redefine itself as a groundbreaking force in advanced technologies beyond traditional car manufacturing.
Sourse: https://www.businessinsider.com/tesla-ev-market-share-in-us-falls-to-38-percent-report-2025-9
