Tesla’s California EV Market Share Dips Below 50%

Sacramento, CA – Tesla Inc. has ceded its dominant position in California’s electric vehicle (EV) market, with its market share falling below 50% for the first time. According to the California New Car Dealers Association, Tesla accounted for 43.9% of new EV registrations in the state during the first quarter of this year, a decrease from 55.5% in the same period last year.

While Tesla’s registrations saw a 15% decline, the overall EV market in California experienced a surge, with sales of non-Tesla EVs increasing by 35%. This shift indicates a growing competition and diversifying consumer preferences within the EV sector.

Factors Behind Tesla’s Market Share Decline

The California New Car Dealers Association suggests that several factors contributed to Tesla’s slump. “An aging product lineup and backlash against Elon Musk’s political initiatives are likely key factors for the decline in Tesla BEV market share,” the association stated in its recent quarterly report.

Furthermore, the anticipation of potential auto tariffs under President Donald Trump’s administration may have influenced consumer behavior. Despite Tesla’s US-based manufacturing, the company’s reliance on imported parts could expose it to increased costs due to tariffs.

Manufacturing Disruptions and Model Updates

Tesla also faced manufacturing disruptions during the first quarter, primarily related to updates to its popular Model Y. The company temporarily halted production at its global car-assembly plants to retool production lines for a redesigned version of its top-selling vehicle.

Despite these challenges, Tesla still maintained a strong presence in the California EV market. During the first three months of the year, Tesla sold 42,322 vehicles, predominantly Model Y SUVs and Model 3 sedans. These two models remained the best-selling EVs in the state, followed by the Honda Prologue and Hyundai Ioniq 5 SUVs.

The Cybertruck also made its mark, ranking No. 8 among all EVs with 2,282 registrations, surpassing Ford’s F-150 Lightning, which rounded out the top 10.

California’s Significance in the EV Market

California stands as the largest EV market in the United States, accounting for 31.1% of all EV registrations last year. The state’s progressive environmental policies and consumer adoption rates make it a crucial battleground for EV manufacturers.

Tesla’s shift in market share highlights the evolving dynamics of the EV industry and the increasing competition among automakers. As more manufacturers enter the EV arena, consumers will have a wider range of choices, potentially reshaping the landscape of electric vehicle sales in California and beyond.

Source: Bloomberg, April 17, 2025