Tesla’s Share of EV Market Slips as Total US Sales Expected to Hit the Million Mark

As electric vehicle sales are poised to surpass 1 million annual sales for the first time ever, Tesla's share of the market has slipped to its lowest on record.

Tesla — by far the leader in the EV industry — sold roughly 156,000 of the more than 313,000 electric vehicles sold last quarter, according to Cox Automotive. While dominating 50% of the EV market would be more than acceptable for most companies, the Austin, Texas-based Tesla controlled 62% of the market in the first quarter of 2023.

Automakers have sold more EVs over the last year as they produced better — and more — EVs and lowered prices, according to Cox. EV sales have increased for 13 straight quarters — or more than three years — and accounted for nearly 8% of all vehicles sold in the July to September period.

The average EV sold for $50,683 in September, down from more than 65,000 last year, according to Kelly Blue Book. Those vehicles also benefitted from incentives worth nearly $5,000 on average, plus a $7,500 tax credit enacted by the Inflation Reduction Act that some EVs are eligible for.

Tesla has led the pack, enacting price cuts on at least some of its vehicles in nearly every month of 2023. The price of a new Tesla has fallen by nearly 25% since Sept. 2022, with the cost to buy a Model 3 sedan dropping 26% on average.

However, Tesla's deliveries failed to match Wall Street's expectations last quarter. The automaker only delivered 430,488 EVs, more than 20,000 vehicles below analysts' predicted 458,713 EVs.

The Model Y was the best-selling EV last quarter, making up nearly 30% of the market. Sales of the Model Y dominated close to 34% of the market in 2023, according to Cox. The Model 3 was the next best-seller, with 17% of the market for the last quarter and 19% for the past nine months.

Sales of the company's Model X SUV— which qualifies for the $7,500 tax credit after several price cuts — dropped by over 29% last quarter compared to the same time in 2022. Further, Tesla's Model S hatchback saw sales drop by nearly 66% last quarter and 43% for the overall year compared to 2022.

General Motors's Chevrolet Bolt subcompact was the most popular non-Tesla EV last quarter, followed by Ford Motor Co.'s Ford Mustang Mach-e. The Bolt — which was recently updated with a next-generation model — accounted for 5% of EVs sold last quarter, while the Mustang made up 4.7% of EV sales.