- Tesla’s new car Registrations in California fell 24% in the second quarter.
- Governor Gavin Newsom said Tesla is finally starting to experience competition from other companies in California.
- Tesla’s problems in California could be a symptom of a larger problem, experts say.
Tesla has a problem in California: residents aren’t buying as much Elon Musks electric cars like they used to do.
Tesla’s new car registrations in the Golden State declined for the third straight quarter, dropping 24% between April and June, according to the California New Car Dealers Association.
And California isn’t the only place where Tesla’s stranglehold on the EV market is starting to falter. The automaker delivery numbers decreased for the second straight quarter in July and Tesla’s share of the U.S. electric vehicle market fell below 50% for the first time.
Tesla CEO Elon Musk has attributed the disappointing sales figures to high interest rates and economic uncertainty in the U.S. But while Tesla’s sales are falling, the EV market as a whole is expanding, including in California.
Data from Cox Automotive shows that total EV sales were up 23% from the previous quarter and more than 11% from the previous year. Similarly, data from CNCDA shows that EV sales in California reached their second-highest quarter ever in July.
‘Dramatic shift’
California Governor Gavin Newsom joked about Tesla’s declining popularity and turned it into a hype. Rivian And from Ford progress in the state this week.
“Tesla is no longer the exclusive manufacturer in this space,” Newsom said in remarks reported by Forbes. “You’re seeing a dramatic shift in competition in the industry. This is exactly what was predicted. This is exactly what we’ve been pushing: competition in the space.”
California Governor Gavin Newsom.Noam Galai/Getty Images
Tesla did not respond to a request for comment from Business Insider.
According to data from Experian Automotive, California is the largest electric car market in the U.S., accounting for nearly a third of all electric car sales.
Meanwhile, Musk has tried to distance himself from the state. In July, Musk said on X that he planned to move SpaceX and X’s headquarters in California. The billionaire has been critical of Newsom and cited a bill signed by the governor in July that bans “forced disclosure” rules in public K-12 schools as his reason for leaving the state.
Musk has become increasingly outspoken on politics in recent years, and it’s unclear whether that has affected sales figures in California, a Democratic Party stronghold.
European drugstore chain Rossman announced Tuesday that it will stop buying Teslas due to Musk’s support for former President Donald Trump.
Earlier this year, some Tesla owners even said they… is considering dropping the brand after Musk made a controversial post on social media and some started saying “I bought this before we knew Elon was crazy” bumper stickers on their Teslas.
“For most people, Elon’s politics wouldn’t be an issue, but when people who bought it try to distance themselves from it, that says something. Would that person really want to buy one again?” said Ivan Drury, an auto analyst for Edmunds.
“It could be the thing that pushes someone who’s still a little bit hesitant over the edge,” he added. “Do they really want to get involved in that when there’s competent competition out there?”
And Tesla may not be able to keep up with the competition.
Lack of updates
“In California, there’s always the question of ‘Is this cool? Is this the latest and greatest?’ And Tesla hasn’t really done much to satisfy that,” Auto Trader editor Brian Moody told Business Insider.
The car manufacturer has not has updated many of its vehicles over the years and are Cybertruck is not exactly aimed at the average consumer.
Moreover, California’s registration numbers are just one sign that traditional automakers are nipping at Tesla’s heels, Moody said. “The companies that have a century of experience making things in the real world, designing things in the real world, marketing and distributing those things in real time, are starting to get it.”
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