Tesla’s new retro-futuristic diner has Californians queuing around the block — but they are less keen on the company’s cars.
The automaker’s registrations in the West Coast state fell more than 20% in the second quarter compared to the previous year, according to data from the California New Car Dealers Association released on Tuesday.
It’s Tesla’s seventh consecutive quarterly decline in the US’s largest EV market, and comes despite California’s new car sales growing in the first half of the year.
The California Dealers Association warned that Tesla’s woes were dragging the rest of the state’s EV market down. Zero-emission vehicles accounted for 18.2% of new cars sold in California in the second quarter of 2025, compared to 22% in 2024, the association’s data showed.
Tesla has been struggling with lacklustre sales this year. The electric vehicle giant is battling consumer backlash over CEO Elon Musk’s high-profile interventions into US politics.
The sales data suggest that the brand damage has been acute in California, which leans liberal and was the birthplace of the Tesla Takedown protest movement.
Tesla is set to report second-quarter earnings after the market closes on Wednesday. Earlier this month, the carmaker reported that its deliveries for the second quarter had fallen by around 13.5% compared to last year, its second consecutive decline in global sales.
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
In addition to the brand damage caused by Musk’s work on DOGE and his support for the Trump administration — which seemingly ended with a high-profile public spat last month — Tesla is also facing fierce competition and a dearth of new products.
A refreshed version of Tesla’s best-selling Model Y, launched earlier this year, has failed to boost sales. The automaker has not rolled out a new model since the Cybertruck in 2023. The polarizing pickup has sold only 11,000 units so far this year, according to data from Cox Automotive.
Tesla faces additional challenges from recently passed legislation that is set to end the $7,500 tax credit for new US-made electric cars in September.
The company recently introduced a wave of new incentives and offers, including free supercharging for some Model 3 purchases and free Full Self-Driving transfers, as it looks to drive sales before the end of the tax credit.
Tesla did not respond to a request for comment sent outside normal working hours.
