Tesla sales fall as study estimates Musk cost the company more than 1 Million U.S. sales

Musk remains a U.S. sales risk

Tesla’s U.S. sales stayed weak in 2026. Research also linked earlier losses to Elon Musk’s partisan activity. Kelley Blue Book estimated Tesla sold 242,100 EVs in America during the first half. That was 10.9% fewer than one year earlier.

A revised Yale study estimated a much larger past effect. It linked Musk’s politics to about 1 million to 1.25 million fewer U.S. Tesla sales. The study measured the sales Tesla might otherwise have made.

Current data shows weaker demand. The research also shows Musk became a measurable sales risk for Tesla in America.

What the 1M estimate means

Researchers used monthly vehicle registration data from U.S. counties. They compared Tesla sales with local voting patterns. The study covers October 2022 through April 2025. The revised 2026 version found a large difference.

Tesla sales could have been 67% to 82% higher without the Musk partisan effect. Researchers used two statistical methods. Both produced similar results. The National Bureau of Economic Research published the original paper in October 2025.

The study did not count canceled orders. Instead, it estimated how many more Teslas might have sold under different political conditions.

Buyers shifted to rival EVs

The study also tracked where some Tesla demand went. Researchers found gains for rival electric and hybrid vehicles. Those sales rose by an estimated 17% to 22% due to buyer substitution.

Tesla’s losses were greater among Democratic-leaning consumers. Reuters also reported Musk gave about $300 million to Republican candidates. His political activity became highly visible. That mattered because Musk is closely tied to Tesla’s brand.

Some shoppers still wanted electrified vehicles. They chose another automaker. The study shows that Musk’s politics may have influenced which EVs or hybrids some Americans bought.

California shows the pressure

California gives a clear example of Tesla’s U.S. sales pressure. Reuters reported new data on April 21, 2026. Tesla registrations in the state fell 24.3% during the first quarter. California zero-emission vehicle sales also dropped sharply.

They fell 40% to 57,111 vehicles. Yale researchers separately studied the state. They found that the Musk partisan effect slowed progress toward California’s zero-emission goals.

The state is one of America’s largest EV markets. Its results connect the research with current vehicle data. They also show Tesla’s weakness in an important U.S. market.

Model 3 takes a major hit

The Model 3 shows how Tesla’s decline reached a key car. Kelley Blue Book estimated 34,944 U.S. sales in the second quarter of 2026. The model sold 48,803 units one year earlier. That was a 28.4% decline.

Model 3 still accounted for 14.2% of the U.S. EV market in the newer quarter. The sedan remains one of Tesla’s main vehicles. Its weaker sales give the company’s decline a clear model-level example.

The drop also shows that pressure reached a car that still holds an important place in Tesla’s American lineup.

U.S. EV demand also weakened

Tesla also faced a smaller U.S. electric vehicle market. Kelley Blue Book estimated 247,226 EV sales in the second quarter of 2026. The market recorded 311,064 sales one year earlier. That was a 20.5% decline.

EVs made up about 5.8% of total U.S. new vehicle sales. This wider market drop matters. Tesla was losing buyers during the same period. At the same time, fewer Americans were buying new EVs overall.

That means Tesla faced company-specific pressure and a weaker market. Both conditions made the U.S. sales environment harder in 2026.

Federal tax credit disappeared

Tesla also lost an important federal sales tool. Clean vehicle credits ended for vehicles acquired after Sept. 30, 2025. The new EV credit had been worth up to $7,500. That benefit lowered the cost for qualifying buyers.

Musk warned about the change on July 23, 2025. He said Tesla could face “a few rough quarters.” The Yale study ended in April 2025. It therefore covered an earlier incentive period.

Tesla entered 2026 under different federal rules. Buyers no longer had the same tax benefit when shopping for a new qualifying electric vehicle.

Brand loyalty fell sharply

Tesla also lost some loyalty among existing customers. S&P Global Mobility data showed loyalty at 73% in June 2024. It fell to 49.9% by March 2025. The rate later improved to 57.4% by May.

It remained below the earlier peak. S&P tracks whether a Tesla household buys another Tesla when shopping again. Reuters reported the decline began after Musk endorsed Donald Trump in July 2024.

The data does not measure every reason for the change. It does show that fewer returning customers stayed with Tesla during that political period.

Cybertruck sales also weakened

The Cybertruck gives another example of weaker Tesla demand. Kelley Blue Book estimated 3,744 U.S. sales in the second quarter of 2026. The truck sold 4,306 units one year earlier. That was a 13.1% decline.

First-half sales reached 7,263 trucks. That total was 32.2% lower than the same period in 2025. Cybertruck deliveries began in late 2023. That makes it much newer than Tesla’s oldest models.

Its decline shows that weaker sales were not limited to aging vehicles. Tesla also faced pressure on one of its newest consumer products.

Tesla cut the Model Y price

Tesla tried to fight weaker demand with a cheaper Model Y. The company launched the Model Y Standard on Oct. 7, 2025. Its price was just under $40,000. The cheaper version had a range of 321 miles. Tesla also removed some equipment. The rear touchscreen was gone.

The panoramic glass roof was also removed. The model arrived just after the federal EV credit ended. Reuters later reported that U.S. Tesla sales stayed weak. The cheaper Model Y shows how Tesla used price and features to attract more buyers during a difficult sales period.

Tesla still leads U.S. EV sales

Tesla still held a huge lead in the U.S. EV market. Kelley Blue Book estimated 124,800 Tesla sales in the second quarter of 2026. That gave the brand 50.5% of the battery electric market. Chevrolet ranked second with 6.0%. Hyundai followed with 5.8%.

Tesla therefore sold more than half of all estimated U.S. EVs during the quarter. That gives important context to the decline. Musk-related losses did not remove Tesla from first place. The company still held a much larger share than any single rival brand in America.

Aging lineup led to change

Tesla also moved away from two older vehicles. Model S arrived in 2012. Model X followed in 2015. In January 2026, Musk said Tesla would end production of both models.

He said their Fremont factory space would support production of Optimus robots. Tesla’s U.S. website now says Model S is no longer in production. Reuters also reported that Tesla’s aging lineup hurt its appeal. The decision marked a major product shift.

Tesla began removing older vehicles while its core car business faced weaker demand. The lineup change added another challenge beyond Musk’s political image.

Elon Musk, Tesla, and SpaceX face serious investor questions, underscoring why Tesla’s product changes, demand problems, and Musk’s broader business ties remain closely watched.

Revised study keeps Musk at center

The revised 2026 study keeps Musk at the center of the sales story. Researchers wrote that his partisan actions had a dramatic effect on Tesla sales, and they found that the effect grew over time.

In the first quarter of 2025, the study estimated Tesla sales would have been about 125% higher without the Musk partisan effect. The authors said their analysis identified a causal effect on Tesla sales.

That gives the story a clear final point. Musk’s politics were not just a public image issue. The study links them directly to lower estimated U.S. vehicle demand.

Tesla introduces lower-cost Model Y Standard variant in Europe, showing how Tesla is also using lower prices to support demand in another major market.

Has Musk’s public image hurt Tesla sales in the U.S.? Share your thoughts in the comments.

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This slideshow was made with AI assistance and human editing.