- Tesla’s new car California registrations fell 24% in the second quarter.
- Gov. Gavin Newsom says Tesla is finally starting to see competition from other companies in California.
- Tesla’s troubles in California may be a symptom of a larger problem, experts say.
Tesla has a problem in California — residents there aren’t buying many cars. Elon Musk’s tram as they used to do.
New Tesla vehicle registrations in the Golden State fell for the third straight quarter, down 24% from April to June, according to the California New Automobile Dealers Association.
And California isn’t the only place where Tesla’s grip on the electric vehicle market is starting to weaken. The automaker The number of deliveries has dropped sharply. for the second consecutive quarter in July, and Tesla’s share of the US electric vehicle market fell below 50% for the first time.
Tesla CEO Elon Musk has blamed the sluggish sales on 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 electric vehicle sales increased 23% from the previous quarter and more than 11% from the previous year. Similarly, data from CNCDA shows that electric vehicle sales in California hit their second-highest quarterly level in July.
‘Significant change’
California Governor Gavin Newsom has downplayed Tesla’s decline in popularity and hyped it up Rivian And Ford’s State progress this week.
“Tesla is no longer a monopoly in this space,” Newsom said in comments reported by Forbes. “You’re seeing a dramatic shift in competition across the industry. This is exactly what was predicted. This is exactly what we’ve been pushing for: competition in this space.”
California Governor Gavin Newsom.Noam Galai/Getty Images
Tesla did not respond to a request for comment from Business Insider.
California is the largest electric vehicle market in the United States and accounts for nearly a third of electric vehicle sales, according to data from Experian Automotive.
Meanwhile, Musk has tried to distance himself from the state. In July, Musk said on X that he SpaceX move plans and X’s headquarters in California. The billionaire has criticized Newsom and cited a bill the governor signed in July that bans “mandatory disclosure” rules in K-12 public schools as a reason for his move out of the state.
Musk has become increasingly vocal about politics in recent years, and it’s unclear whether that has affected sales in California — a Democratic stronghold.
On Tuesday, European pharmacy chain Rossman announced plans to stop buying Tesla vehicles due to Musk’s support for former President Donald Trump.
Earlier this year, some Tesla owners even said they considering abandoning the brand after Musk posted a questionable post on social media and some people wrote “I bought this before we knew Elon was crazy” their Tesla bumper stickers.
“For most people, Elon’s political views don’t matter, but when people who have already bought the car try to part ways, that says something. Is that person really going to buy another one?” said Ivan Drury, an automotive analyst at Edmunds.
“It could be something that pushes someone over the edge who’s a little hesitant,” he added. “Do they really want to get caught up in that when there’s competent competition?”
And Tesla may not be able to keep up with the competition.
Missing updates
“In California, people are always asking ‘is this cool? is this the latest thing?’ And Tesla really hasn’t done much to keep up with that question,” Auto Trader editor Brian Moody told Business Insider.
The car manufacturer has not has updated many of its vehicles over the years. and it Electric Truck not really aimed at the average consumer.
Moreover, the California registration numbers are just another sign that traditional automakers are catching up to Tesla, Moody said. “Companies that have a century of experience making things in the real world, designing things in the real world, marketing and delivering those things in real time, they’re now catching up.”
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