Tesla has endured a growing number of challenges over the past year, leading to a decreasing market share and an uptick in investor uncertainty. Industry insiders have taken a closer look under the hood and offered their insights on which roadblocks have hurt the electric vehicle manufacturer the most.
First reported by Reuters, Tesla's U.S. market share in August dropped to its lowest point in eight years. According to data provided by Cox Automotive, Tesla accounted for just 38% of total EV sales in the U.S. in August. Considering the company was once hailed as the undisputed leader in the EV market, the fall from grace is certainly eye-opening.
Throughout 2025, Tesla has reported a steep decrease in car sales in many vital automotive markets across the globe. Despite this, the company has continued to prioritize the advancement of its artificial intelligence technology. This was made clear following the announcement of Tesla's "Master Plan Part 4," which touted a future filled with AI-driven humanoid robots and "sustainable abundance."
Stephanie Streaty, director of industry insights at Cox Automotive, spoke to Reuters about the leading cause for Tesla's recent troubles and why it has become a major concern. "I know they're positioning themselves as a robotics and AI company. But when you're a car company, when you don't have new products, your share will start to decline," Streaty said.
Those sentiments were echoed by Bloomberg tech reporter Edward Ludlow, who took a closer look at the performance of Elon Musk's AI project. "xAI is burning cash at a furious rate — as much as $1 billion per month, according to Bloomberg reporting — while also trying to own its compute infrastructure outright," wrote Ludlow.
To make matters worse for Tesla, many automakers are stepping up their game in the EV arena. Companies like Hyundai and Toyota have made tremendous strides in EV production, and their recent market share gains reflect that advancement.
"These legacy manufacturers are all benefiting from this sense of urgency, and they're able to have attractive offerings for their vehicles — and it's working," added Streaty.
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