Californians may be losing enthusiasm for Tesla

Tesla sales fell 7.8% in the first quarter of 2024.
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  • According to a report from California Auto Outlook, Tesla registrations fell again in California last quarter.
  • According to the report, Tesla saw sales decline 7.8% in the state, while Rivian's rose 87.1% and GMC rose 24,700%.
  • Tesla still leads the electric vehicle market in California, but the president of CNCDA said the registration declines are notable.

Californian drivers' enthusiasm for Tesla seems to be waning somewhat.

A report from the California Auto Outlook shows that Tesla registrations in the state are once again declining year-over-year. The report released Monday by the California New Car Dealers Association summarizes first-quarter vehicle registration numbers statewide.

According to the report, Tesla saw a 7.8% decline in sales in California in the first quarter, from 54,265 in the final quarter of 2023 to 50,025 in the first quarter. The decline follows last quarter's 9.8% decline.

Meanwhile, electric car startup and Tesla competitor Rivian saw an 87.1% increase in registrations in California, according to the report. According to the data, other brands also saw a significant increase in EV sales, including Mercedes, where EV sales increased by around 125%.

Tesla's market share in California also fell to an estimated 11.6% while other brands soared, with Toyota leading the way with 16.6% of the market in the state and Honda capturing 10.5%, the report said.

As Tesla's market share shrinks in the Golden State, established automakers are staging a comeback by introducing new electric and hybrid vehicles, the report said.

This is reflected in a 14% year-on-year increase in BEV sales by traditional dealers, although direct sellers saw a slight decline, the report said. Franchise dealers also hold over two-thirds of the market share for alternative fuel vehicles, underscoring consumers' trust in local dealers and traditional brands as the landscape evolves, according to the report.

CNCDA chairman and owner of several car dealerships said in a statement accompanying the report's release that “the Tesla sales model is ineffective,” citing layoffs and general dissatisfaction with the brand's service. It is known that Tesla ignored car dealers and opted to sell directly to consumers.

Tesla is still the No. 1 electric car seller in California

Although Tesla sales may have declined in California, the vehicle remains a top electric vehicle seller in California, according to the report.

Tesla dominated the 2024 all-electric vehicle and plug-in hybrid rankings for 2024, with the Model Y, Model 3 and Model X taking the top three of 15 spots.

Tesla also ranked first in best-selling luxury high-end sports cars, near-luxury cars, luxury compact SUVs and best-selling light trucks. Tesla took second place in luxury mid-size SUVs and rose from first to third place in best-selling passenger cars.

Tesla's Model 3 remained in the top three best-selling passenger cars, but CNCDA President Brian Maas told BI that the downgrade was significant.

Maas, who acknowledged that sales fluctuate from quarter to quarter, said Tesla has previously seen consistent growth in California – and the decline in registrations, market share and car rankings is an indication that the company is on the rise in the state a plateau stagnates and “shrinks”.

“What you see overall is that there are more and more opportunities for electric vehicles,” Maas said. “And this competition is eating into Tesla’s numbers.”

Anna Harden

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