At an eight-year low, Tesla's market share of electric vehicles in the US has plunged.

In August, Tesla's market share in the US dropped to a nearly eight-year low, accounting for only 38% and falling below the 40% mark for the first time.

According to data from research firm Cox Automotive, Tesla's market share in the US in August dropped to a nearly eight-year low. Consumers are increasingly choosing new electric vehicles from competitors rather than Tesla's older models.

This trend highlights the pressure on Tesla from major automakers by increasing subsidies for electric vehicles during a difficult time for the industry as a whole.

Analysts expect the overall sales of electric vehicles in the US to continue to grow in September. However, as the federal tax credit for car purchases expires at the end of the month, sales may decline, which will further increase the financial pressure on Tesla and other automakers.

Tesla once accounted for more than 80% of the US electric vehicle market. Now, in August, it only accounts for 38%, falling below the 40% mark for the first time, which is the lowest level since October 2017.

Different from competitors constantly launching new electric vehicles, Tesla's strategic focus has shifted to the development of driverless taxis and humanoid robots, and it has abandoned the plan for low-cost electric vehicles.

Recently, Elon Musk reiterated the strategic position of the robotics business at Tesla. He said that the large-scale implementation of FSD and Optimus will be the most important thing, as about 80% of Tesla's future value will come from the Optimus robot.

Last Friday, Tesla's board of directors proposed an unprecedented compensation plan: if the company's market value reaches $8.5 trillion within ten years, Musk could receive an additional stock incentive worth trillions of dollars.

However, Tesla's core revenue still comes from the electric vehicle business. Its latest model is the Cybertruck pickup truck launched in 2023, but it has far failed to replicate the success of the Model 3 or Model Y SUV. Although Tesla has updated the Model Y, the updated version has not met market expectations, and the company is heading towards a second consecutive year of declining sales.

Cox's complete data for July shows that Tesla's market share dropped from 48.7% in June to 42%, the largest single-month decline since March 2021.

In addition, Musk's political stance and his relationship with Donald Trump have also damaged the brand. He served as an "adviser on government efficiency" in the Trump administration this year but publicly fell out with the president in May.

For many years, as a market leader, Tesla achieved rapid sales growth and considerable profits with its high-end positioning. However, now, against the backdrop of intensified competition and weak sales, the company is forced to cut prices to maintain sales. This strategy has compressed profit margins and raised concerns among investors.

The decline in market share highlights the dilemma Tesla faces: either maintain sales with higher subsidies at the cost of profits or maintain profits but lose market share.

The data for July shows that competitors' growth rates have significantly exceeded Tesla's. Hyundai, Honda, Kia, and Toyota have all offered higher purchase subsidies than Tesla, resulting in a month-on-month increase in electric vehicle sales ranging from 60% to 120% and a significant increase in market share.

This article is from the WeChat official account "Science and Technology Innovation Board Daily", author: Niu Zhanlin. Republished by 36Kr with permission.