Tesla’s dominance in California’s electric vehicle market is receding.
Tesla’s slide in California continued into a sixth straight quarter, with registrations down 15.1% in early 2025 — even as overall new car registrations rose 8.3% year over year. The drop marks Tesla’s steepest quarterly loss in more than a year, and comes at a moment when the state’s car market saw a boost ahead of anticipated tariffs, according to the California New Car Dealers Association.
Meanwhile, Tesla’s share of California’s electric vehicle market dropped from 55.5% to 43.9% between the first quarters of 2024 and 2025, according to data from CNCDA.
Tesla’s registrations declined even as the carmaker released a refreshed version of its top-selling Model Y in January. The company’s aging lineup — anchored by models that haven’t seen major overhauls in years — has been increasingly outpaced by competitors.
A spokesperson for Tesla did not respond to a request for comment.
California has long been a key market for Tesla. It’s the birthplace of Tesla and it represents the largest EV market in the US. But Tesla and its CEO’s relationship with the state has soured in recent years.
Elon Musk relocated Tesla’s headquarters to Texas in 2021 and has since ramped up his political visibility, aligning himself with right-wing figures and policies. Those moves haven’t gone unnoticed in California, where Democratic leaders have clashed with Musk publicly and voters lean blue. Musk’s recent role with the Department of Government Efficiency has sparked further backlash.
Tesla showrooms over the past few months have been inundated with demonstrators, protesting Musk’s involvement with President Donald Trump and his role with DOGE.
In March, Tesla vehicles made up 1.4% of all trade-ins in California, up from just 0.4% a year earlier — a 250% increase, according to data from Edmunds, which looked at models from 2017 or newer.
Tesla’s California slump mirrors wider challenges for the automaker globally.
Overall, Tesla’s first-quarter delivery numbers were 13% lower than in the same period the previous year, marking the worst quarter since the beginning of 2022.
Tesla’s stock is down 35% year-to-date.
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