Tesla's U.S. Sales Hit 4-Year Low, Down 23% Year-on-Year

Impact of Expiration of EV Tax Credit... Market Share Rises

On December 11 (local time), Reuters reported, citing estimates from Cox Automotive, that Tesla's sales in the United States last month hit their lowest point in nearly four years.

According to Cox Automotive, an automotive market research firm, Tesla sold 39,800 electric vehicles in the United States in November, down about 23% from 51,513 units in the same month last year. This is the lowest monthly figure in three years and ten months, since January 2022.

Tesla logo. Photo by Reuters and Yonhap News

This decline is attributed to the expiration of the $7,500 federal electric vehicle tax credit at the end of September under the Donald Trump administration.

To address the drop in demand caused by the end of the tax credit, Tesla launched lower-priced standard versions of its main products, the Model Y and Model 3, in October. These standard models are approximately $5,000 cheaper than the previous versions. However, even with the introduction of these more affordable options, Tesla was unable to boost demand.

However, it appears that other competitors have been hit even harder by the end of the tax credit than Tesla. In November, total electric vehicle sales in the United States fell by 41%. While Tesla's sales also declined significantly, its market share increased from 43.1% to 56.7%.

Stephanie Valdez Streaty, Industry Insights Director at Cox Automotive, stated, "The decline in sales shows that there is not enough demand for the standard models, which were expected to drive sales after the tax credit ended. Next year, many automakers plan to launch affordable vehicles packed with fun features, so Tesla will face serious challenges."

Recently, Tesla began offering a zero percent interest installment plan for the standard Model Y on its U.S. website. While year-end discount events are common, the market interprets such discounts on a model released just over a month ago as a sign of weak demand. Reuters reported that both the standard Model Y and standard Model 3 are listed as available in stock on Tesla's website, with price reductions applied.

Shawn Campbell, advisor at Camelson Investment, commented, "If there had been core demand, they would not have offered zero percent interest loans. Ultimately, to resolve the demand issue, new and innovative models are needed."