Tesla U.S. Sales Drop Amid Gains for GM and Competitors

Tesla Faces Declining Sales Amid Growing Electric Vehicle Market

In a notable shift within the electric vehicle (EV) market, Tesla’s sales in the United States have experienced a significant downturn, dropping nearly 9 percent in the first quarter of the year. This decline is particularly striking considering that the overall market for electric vehicles is expanding. According to a report by Cox Automotive, a leading research firm, Tesla’s reduced sales highlight evolving consumer preferences and increasing competition in the electric vehicle segment.

The report indicates that while Tesla struggles with diminishing sales, the broader electric vehicle market is thriving. Sales of electric vehicles across the U.S. surged 11 percent during the first quarter, amounting to approximately 300,000 cars and light trucks sold. In a stark contrast, the overall automotive market has remained relatively flat, indicating a changing landscape where consumers are exploring options beyond Tesla. Approximately 8 percent of new car sales were electric, showing a slight increase compared to the previous year.

Despite Tesla’s struggles, it remains a dominant force in the electric vehicle market, accounting for 44 percent of sales in the U.S. However, this figure represents a significant drop from the 51 percent market share the company held just a year ago, showcasing the intensifying competition it faces from traditional automakers who are rapidly advancing their electric vehicle offerings.

Tesla’s decline in sales is not just a national trend; it reflects a broader global slump as well. The company reported that deliveries in all markets fell by 13 percent, totaling 337,000 vehicles in the same quarter. Analysts attribute these challenging sales figures to several factors, including an aging lineup of models and disappointing sales of the much-anticipated Cybertruck. Additionally, Elon Musk’s political affiliations, including a public embrace of former President Donald Trump and right-wing politics, have reportedly alienated numerous potential buyers. Research indicates that Democrats and independents are statistically more likely to purchase electric vehicles compared to Republicans.

The Cybertruck, Tesla’s latest electric offering, has not met earlier projections, with only 6,400 units sold in the first quarter. While this number presents a doubling from sales a year prior—when production was still ramping up—it falls notably short of the figures observed in the previous quarter of 2024. The company’s slow rollout of new models has allowed competitors to make significant inroads into Tesla’s former stronghold.

Automakers like General Motors (G.M.) have begun to capitalize on Tesla’s struggles. The Chevrolet Equinox Electric, which retails for approximately $35,000 and boasts a range exceeding 300 miles per charge, has found favor amongst consumers, with G.M. reporting 10,300 sales of the vehicle in the first quarter. This is particularly noteworthy as the Equinox was not available the previous year. G.M. brands now account for 11 percent of the electric vehicle market, a notable increase from 6 percent just one year prior.

Another competitor, Ford, is also attempting to carve out a niche in the electric vehicle market with its Mustang Mach-E, which topped the sales ranks among non-Tesla electric vehicles. Nonetheless, future sales of the Mach-E may be hindered due to tariffs imposed on imported cars made in Mexico under Trump’s administration, which could force Ford to increase vehicle pricing.

While Tesla produces all of its vehicles in the U.S., mitigating some effects of the tariffs, the company has still faced challenges. Recently, Tesla stopped accepting orders from Chinese customers for its luxury models, the Model S and Model X, due to substantial tariffs China implemented on U.S. imports in retaliation for Trump’s trade policies.

As the electric vehicle landscape continues to evolve, it remains to be seen how Tesla will respond to these growing challenges. The company’s ability to innovate, refresh its model lineup, and regain consumer trust will likely determine its future in a market that is becoming increasingly crowded with capable contenders. With traditional automakers stepping up their game and new players entering the market, Tesla must adapt quickly to maintain its status as a leader in the electric vehicle revolution.

Claire Fu contributed reporting to this article.