Tesla is losing U.S. market share. And that's in the middle of an EV boom.

By Claudia Assis

Tesla has lost its 'aura,' which analyst says had been propping up sales in recent months

Five years ago, Tesla sold about eight in 10 electric vehicles in the U.S.

Tesla Inc.'s share of the U.S. EV market has fallen to its lowest on record, Cox Automotive said Wednesday, despite a boom of sorts ahead of the end of tax incentives.

Cox Automotive estimated that Tesla's (TSLA) share of the U.S. electric-vehicle market was at 38% in August, its lowest-ever point and down from a 42% market share in July.

Tesla's August U.S. sales hovered at 55,500 vehicles, an increase of 3% from July but a drop of nearly 7% from August 2024, the Cox analysts said.

That comes as U.S. EV sales had their best-ever month, with Cox estimating August EV sales of 146,147 vehicles, a nearly 10% share of total auto sales.

Cox expects that the third quarter will show an all-time record for EV sales in the U.S. - the fourth quarter of 2024 currently holds that distinction, with 365,000 EVs sold. The sunset of the Biden era's IRA incentives at the end of this month "is driving urgency in the market right now," a Cox spokesperson said.

Five years ago, Tesla had a nearly 80% market share in the U.S., Cox said. That was before competition from legacy automakers such as Ford Motor Co. (F) and General Motors Co. (GM) as well as newcomers such as Rivian Automotive Inc. (RIVN) started pouring in, and before Tesla Chief Executive Elon Musk waded deeper into political controversies.

Tesla does not release monthly sales, but rather past-quarter sales, usually at the beginning of the current quarter.

It also does not report sales by region or by car model; instead, it groups its more affordable, and popular, Model 3 and Model Y vehicles, and all others under "other models." The EV maker is expected to report third-quarter sales and production numbers in early October.

Sam Fiorani at AutoForecast said that Tesla has lost its "aura," which had been propping up sales in recent months.

Tesla's brand has been hurt by Musk's political leanings and deep involvement in the so-called Department of Government Efficiency, or DOGE, earlier this year.

A very public feud in June with President Donald Trump may have soured customers on the other side of the spectrum, but up until then right-leaning and Trump-supporting customers took to social media to voice support for Tesla.

But "anyone who wanted to get on that bandwagon did so by July and August," said Fiorani.

Supporters of Musk and Trump "bought their Teslas earlier in the year, and the pent-up demand for these vehicles disappeared by summer," he said.

Tesla shares have dropped about 14% so far this year, contrasting with gains of around 11% for the S&P 500 index SPX.

-Claudia Assis

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09-10-25 0600ET