Rough November for Elon Musk's Tesla: US sales sink to nearly 4-year low; cheaper EV versions fail to spark demand

Tesla’s latest attempt to revive demand in the United States faltered in November, with the company posting its weakest monthly sales in nearly four years, despite rolling out cheaper versions of its most popular electric vehicles. Exclusive figures shared with Cox Automotive, cited by Reuters show that US sales fell to about 39,800 units, a sharp drop from 51,513 a year earlier and the lowest level since January 2022.The decline comes at a critical time for Tesla, which relies on its new budget “Standard” versions of the Model Y and Model 3 to attract customers. Introduced in October, priced roughly $5,000 below the earlier base models, the lower-cost options were expected to soften the blow of the Trump administration’s decision to scrap the $7,500 EV tax credit at the end of September.At the same time, the company is also focusing on robotaxis and humanoid robots, projects that have helped sustain its $1.4 trillion market value.The cheaper models have, however, not delivered the anticipated boost. According to Cox, which tracks industry-wide sales, November’s total fell nearly 23% year-on-year. Analysts say the drop suggests the new variants have not attracted enough incremental buyers.“The drop certainly shows there is not enough demand for the Standard variants that were supposed to boost sales after the tax credit expiry,” said Stephanie Valdez Streaty, Cox’s director of industry insights. “What’s also happening is Standard sales are cannibalizing into sales of Premium versions, especially the Model 3.”Most electric carmakers saw an even steeper impact from the end of federal credits, with overall US EV sales sliding more than 41% in November. A notable detail is that Tesla, despite its own slump, was able to grow its market share to 56.7% from 43.1% a year earlier. Tesla’s slowdown extends a broader trend: deliveries fell last year for the first time after a run of rapid growth, pressured by high interest rates, subdued consumer sentiment and increasing competition, particularly from cheaper models in China and Europe. Analysts expect another fall this year, with Tesla’s lineup largely limited to older models and minor updates. Its most recent new product, the Cybertruck, has struggled to find a sizeable customer base.“Tesla has a serious challenge on its hands next year when several other automakers are planning to roll out cheaper vehicles that are also full of fun features,” Streaty said. “So the answer is that Tesla needs a completely new vehicle in its fleet. Period.”The company has also been dealing with reputational setbacks linked to CEO Elon Musk’s political activities, including his work for US President Donald Trump and far-right statements that have triggered protests and affected its image.To entice buyers, Tesla has begun offering 0% financing on the Standard Model Y, according to its US website. Both the Standard Model Y and Standard Model 3 were also listed in inventory with reduced prices. Analysts say the move underscores the pressure to stimulate demand.“I think the bottom line is, if the demand was there they wouldn't be offering 0% financing,” Shawn Campbell, an adviser at Camelthorn Investments told Reuters. “The solution for the demand issue ultimately needs to be new, fresh models.”