Tesla’s new vehicle registrations in California declined by 15% in the first quarter of 2025, as the electric vehicle maker lost market share in the U.S. state that has traditionally been its stronghold, according to data released by the California New Car Dealers Association (CNCDA) on Wednesday.
Tesla’s share of California’s battery-electric vehicle (BEV) market dropped to 43.9% from 55.5% a year earlier, marking the first time the automaker has failed to account for the majority of EV sales in the state. The overall market for zero-emission vehicles in California grew 7.3% during the same period, with brands such as Honda, Ford Motor and General Motors’ Chevrolet gaining ground.
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“An aging product lineup and backlash against Musk’s political initiatives are likely key factors for the decline in Tesla BEV market share,” the CNCDA said in a statement.
California, which accounted for nearly one-third of Tesla’s U.S. sales last year, has been a key contributor to the company’s domestic performance. But Tesla’s decline comes amid growing criticism of CEO Elon Musk’s political affiliations, including his support for former President Donald Trump and engagement with far-right figures in Europe. The company also reported a global delivery drop of 13% in the first quarter.
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The Model Y SUV remained Tesla’s top seller in California but saw sales fall roughly 30% compared to the same period last year, CNCDA said. Tesla has attributed the decline in part to a temporary production slowdown due to retooling of assembly lines for the updated Model Y.
Shares of Tesla closed down 5.2% on the day, extending a broader decline that has seen the stock lose nearly half its value since mid-December. Analysts have cut their estimates for Tesla’s first-quarter earnings ahead of the company’s results next week, with forecasts dropping from 69 cents to 42 cents per share, according to LSEG data.
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Looking ahead, the CNCDA projects that total new vehicle registrations in California will fall 2.3% in 2025, citing the impact of U.S. trade policies on the broader automotive market.
