Tesla's EV market share has fallen below 40%, but the company may not be overly concerned. | Carscoops

      Sales for Tesla may see a boost when it begins production of the fully-autonomous Cybercab.

      Tesla previously commanded 80 percent of total electric vehicle (EV) sales in the United States but now views itself primarily as a robotics and AI company. Traditional automakers are introducing competitive EV alternatives to Tesla.

      Throughout most of the last decade, Tesla has led the U.S. electric vehicle market, setting the standard for competitors and enjoying a significant head start that appeared unassailable. By 2025, it still maintains a larger market share than any other single brand. However, recent sales data indicates that this dominance is beginning to wane.

      In August, Tesla's share of U.S. EV sales dipped below 40 percent for the first time since October 2017, suggesting that its initial advantages may be diminishing.

      According to new data from Cox Automotive, Teslas made up 38 percent of all EV sales last month. While any legacy automaker would celebrate such market dominance, it marks a considerable decline for Tesla from its previous 80 percent share.

      **New Products, New Challenges**

      The forthcoming Tesla Cybercab could provide a boost for the company's presence in the U.S. market, but it faces significant challenges in replicating the success of the Model 3 and Model Y. With only two seats and no traditional driving controls, the vehicle completely relies on autonomous driving, a design choice that limits its appeal to a broader audience, along with various legal obstacles. Most states still require conventional driver inputs, and the inconsistent laws regarding self-driving cars will slow Tesla's rollout.

      At the same time, competitors are closing the technology gap and releasing their own attractive, competitively priced electric vehicles. This steady influx of competition has diminished Tesla's formerly unassailable lead.

      **Pursuing an AI Identity**

      Some analysts believe that Tesla may not be overly concerned about maintaining its dominance in the auto sector, as noted by Reuters. In recent years, the company has shifted its focus towards being a robotics and artificial intelligence firm, even though its automotive division still accounts for the majority of its revenue.

      “I understand they are trying to position themselves as a robotics and AI company,” said Stephanie Valdez Streaty, Director of Industry Insights at Cox Automotive, to Reuters. “However, if you’re a car manufacturer lacking new products, your market share is bound to decline.”

      **The Market Warms Up**

      Data from August indicates the EV market in the U.S. expanded by 14 percent. A significant factor in this increase is the impending expiration of the federal EV tax credit at the end of this month. Although overall EV sales rose, Tesla's growth slowed by 3.1 percent.

      Cox Automotive anticipates that Tesla's market share will continue to diminish as more traditional manufacturers make headway. “These legacy manufacturers are capitalizing on a sense of urgency, and they’re offering appealing options for their vehicles – and it’s proving effective,” Streaty stated. “I expect we will keep seeing this momentum into September.”