Tesla‘s electric-vehicle registrations in California dropped 15.1% during the first quarter, industry data showed, signaling an accelerated decline and growing challenges for the Elon Musk-led automaker in its biggest U.S. market.
In California, often viewed as a bellwether for EV trends, Tesla’s share has fallen to 43.9% from 55.5% a year earlier, while brands such as Honda, Ford and GM’s Chevrolet have grown their footprint, according to the California New Car Dealers Association (CNCDA).
Overall zero-emission vehicle sales in the state also rose 7.3% during the same period.
“An aging product lineup and backlash against Musk’s political initiatives are likely key factors for the decline in Tesla BEV market share,” the industry body said.
The company reported earlier this month its first-quarter sales globally fell 13% to the lowest in nearly three years, hurt by pushback against Musk, rising competition and as customers wait for a refresh of its bestselling Model Y.
The billionaire’s leadership of the Trump administration’s Department of Government Efficiency has sparked widespread protests across the United States, with activists demonstrating against his role in federal workforce cuts and the cancellation of contracts funding global humanitarian programs.
Musk’s popularity has been declining among liberal voters, who have traditionally been more inclined to purchase electric vehicles, particularly in environmentally conscious markets such as California.
California accounts for nearly a third of Tesla’s sales in the U.S., according to Reuters calculations based on data from Cox Automotive and the California New Car Dealers Association.
The CNCDA also expects new vehicle registrations in the state to fall 2.3% from last year due to U.S. trade policies.
Model Y snags
While the Model Y remained the best-selling EV in the state, its sales plummeted about 30% in the first quarter, compared with a year earlier.
Tesla said earlier this month that retooling production lines for the refreshed Model Y at four of its factories resulted in several weeks of lost production during the first quarter.
Meanwhile, analysts attributed some of the drop in overall sales in the January-March period to customers waiting for cheaper versions of the refreshed Model Y crossover.
Investors will be closely watching Tesla’s earnings report on Tuesday for indications of whether the company will maintain its annual growth forecast despite the challenging quarter.
—Akash Sriram, Reuters
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