Tesla’s share of the United States electric vehicle market declined to 38 per cent in August, marking its weakest level since October 2017, as intensifying competition erodes the company’s once-dominant position.

The company, which only a few years ago controlled more than 80 per cent of U.S. EV sales, is now contending with heightened pressure from established carmakers including Hyundai, Honda, Kia, Toyota and Volkswagen. These manufacturers have accelerated their electric rollout while offering attractive financing options and incentives such as free charging, drawing customers away from Tesla.

Industry data show that while Tesla’s sales grew by 3.1 per cent in August, overall EV sales in the U.S. expanded by 14 per cent, highlighting the scale of the company’s slowdown relative to the market.

Analysts point to Tesla’s ageing product line as a key factor. The Cybertruck, the company’s most recent launch, has not generated the mass-market appeal of earlier models, and plans for a lower-cost vehicle remain on hold as Tesla shifts resources to new initiatives including robotaxis and humanoid robotics.

In response, Tesla has engaged in repeated price cuts to sustain sales, a strategy that has raised concerns among investors about profitability and long-term margins. The company’s brand positioning has also been complicated by political controversies surrounding chief executive Elon Musk, which some observers suggest may be alienating a portion of the customer base.