Tesla (TSLA) has seen its U.S. electric vehicle (EV) market share fall to 38% in August, its lowest level since 2017, according to Cox Automotive data reported by Reuters. The drop marks the first time Tesla has slipped below the 40% level in nearly eight years. While Tesla sales rose 3% in August, the wider U.S. EV market grew 14%, showing that rivals are now pulling ahead.
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Competitors Add Pressure
The slip comes as rivals gain traction in the EV market. Automakers such as Hyundai (HYMTF), Kia (KIMTF), Toyota (TM), and Volkswagen (VWAGY) have stepped up with new EV models and strong buyer perks.
Free charging and no-interest loans have made these options more attractive, putting pressure on Tesla’s pricing power.
TSLA Cuts Prices and Focuses on Robotics
Tesla has been reducing prices to support demand, with its latest cut bringing the Model 3 rear-wheel drive in China down to 259,500 yuan ($36,279). Still, the company has lost ground to BYD (BYDDY) in China and is seeing weak demand in Europe, raising questions about the health of its growth outside the U.S.
At the same time, Tesla is putting more focus on long-term projects such as robotaxis and humanoid robots. While these may deliver gains in the future, the lack of new, affordable EV models could make it harder for the company to regain lost share in the near term.
Tesla Connects Future Growth to Musk’s Pay Deal
Tesla is also tying its future closely to CEO Elon Musk. The company’s board has proposed a record $1 trillion pay package for CEO Elon Musk. The deal would only be unlocked if Tesla reaches a market value of $8.5 trillion within 10 years, along with meeting other business targets.
This plan highlights how Tesla’s growth story depends not just on car sales but also on Musk’s ability to deliver bold bets such as robotaxis and AI. For investors, it means the company’s long-term direction is tied as much to these projects as to its current EV lineup.
Is TSLA Stock a Buy, Hold, or Sell?
On TipRanks, TSLA stock has a Hold consensus rating based on 14 Buys, 14 Holds, and eight Sell ratings. The average Tesla price target of $309 implies 11.93% downside potential from current levels. Year-to-date, TSLA stock has lost 13.1%.
