Additional Coverage:
- Tesla sales are nosediving in California, and it’s dragging the state’s entire EV market down (businessinsider.com)
Tesla’s California Dreamin’ Turns into a Sales Slump
Tesla’s flashy new diner in Los Angeles is drawing crowds, but the company’s cars are telling a different story. Registrations for Tesla vehicles in California plummeted more than 20% in the second quarter of 2025 compared to the same period last year, according to data released by the California New Car Dealers Association. This marks the seventh consecutive quarter of declining sales for Tesla in the nation’s largest EV market, a trend bucking the overall growth in California’s new car sales during the first half of the year.
The California Dealers Association highlighted Tesla’s struggles as a drag on the state’s overall electric vehicle market. Zero-emission vehicles made up 18.2% of new car sales in California during the second quarter of 2025, down from 22% in 2024.
Several factors contribute to Tesla’s sales slump. Industry analysts point to consumer backlash against CEO Elon Musk’s political stances, particularly impactful in the more liberal California market. This backlash manifested in the “Tesla Takedown” protest movement that originated in the state.
Adding to Tesla’s challenges are intensifying competition and a lack of new models. While a refreshed Model Y debuted earlier this year, it hasn’t significantly boosted sales.
The Cybertruck, launched in 2023, has only sold approximately 11,000 units this year. Furthermore, the impending expiration of the $7,500 federal tax credit for US-made electric cars in September adds pressure.
Tesla has responded with various incentives, such as free supercharging and Full Self-Driving transfers, to stimulate sales before the tax credit ends. The company is expected to report its second-quarter earnings soon, following a global sales decline of about 13.5% compared to last year.