It’s been a forgettable 2025 for Tesla (TSLA) so far, shaped as much by the chatter around its CEO as by the numbers on its income statement.
Elon Musk’s political endeavors and clashes with labor groups led to widespread European protests early this year, hurting brand equity just as its Chinese rivals turned up the heat.
By mid-summer, the cracks showed up in its fundamentals.
Q2 deliveries tanked nearly 14% to 384,000 vehicles, with sales slipping 12% to $22.5 billion, and operating income dropping 42%.
Consequently, Wall Street punished the stock, currently down 20% year-to-date, underperforming both the S&P 500 and other tech juggernauts.
That nosedive isn’t just about weaker margins but also over the mounting investor fatigue with Tesla’s constant turbulence.
That said, a brand-new report is flashing red flags regarding customer behavior on Tesla’s home turf, which raises even tougher questions ahead.
Image source: TheStreet/Shutterstock
Tesla’s EV dominance in the U.S. is slipping fast
Tesla’s iron grip on the U.S. EV market is unraveling fast.
A new report from Cox Automotive shows Tesla’s market share dipped to just 38% in the U.S. in August, its lowest level since 2017.
That’s a mighty fall from the 80%+ dominance it once commanded, and it couldn’t have come at a worse time.
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We’re seeing legacy automakers like Hyundai, Honda, Kia, Toyota, and Volkswagen digging deeper into the EV niche with more incentives and newer models.
According to Stephanie Valdez Streaty, Cox’s director of industry insights:
“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.”
For more perspective, in July alone, Tesla’s market share decreased from 48.7% to 42%, resulting in its sharpest single-month drop since March 2021, when Ford rolled out the Mustang Mach-E.
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Meanwhile, sales for its competition skyrocketed between 60% and 120%, a trend that’s likely to accelerate through September before tax credits expire.
Emerging themes regarding Tesla’s market share:
- Core sales are growing more sluggishly than the market.
- Legacy brands are gaining greater market share with aggressive deals.
- An aging lineup and the lack of new models are becoming a liability.
- Price trumps prestige for EV buyers, and that’s hurting Musk.
Tesla’s global market share is under siege
Tesla is up against some serious pressure outside the U.S., too, with new data shedding light on the steep declines in two of its most important regions in Europe and China.
In Western Europe, Tesla’s second-quarter battery electric vehicle (BEV) registrations plummeted 28.5% year-over-year.
In contrast, the overall BEV market grew by 22%, pushing its share below 9%, according to Schmidt Automotive, pulling it behind Volkswagen and a collective of Chinese automakers for the first time on a quarterly basis.
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The trend is even more pronounced at the country level. In Germany, for instance, Tesla’s first-half BEV share collapsed to roughly 3.4%, down from around 11% in the same period last year.
Also, August figures across France, Sweden, and Denmark showed plenty of weakness.
Meanwhile, the China picture is also getting worse. August retail sales nosedived 10% year-over-year to 57,152 units, which was its sixth straight monthly year-over-year decline.
On a wholesale basis (including exports), Tesla sold 83,192 vehicles, down 4% on a year-over-year basis but up 22.6% from July.
Year-to-date, Tesla’s EV market share in China stands at around 4.7%, placing it fifth among all players.
- Western Europe Q2: Tesla BEV share <9%; registrations -28.5% YOY versus market +22%.
- Germany H1: Share 3.4% (versus 11% prior-year period); also, sentiment headwinds are adding to the pressure.
- August prints: France -47.3% YOY; Sweden -84%; Denmark -42%.
China: August retail 57,152 (-10% YOY); wholesale 83,192 (-4% YoY); EV share 4.7% (ranked fifth).
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