California vs Musk: Tesla sales in key state fall 21 per cent
In the second quarter of 2025, Tesla's electric car sales in California fell 21%, from 52,000 to 41,138 registered vehicles. This is the seventh consecutive quarter with a year-over-year decline and the fourth consecutive quarterly decline.
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Tesla's drop in performance was reflected across the market, with the share of electric cars among new cars in California falling from 22% to 18.2%. Recall, California is the largest market for electric cars in the US, accounting for about a third of all sales in the country.
Amid Tesla's decline, other automakers are showing growth: BMW, Mercedes-Benz, Genesis, Cadillac and Acura have improved their positions in the region.
Analysts identify several reasons for Tesla's declining sales in California:
- Elon Musk's public image factor - his involvement in politics related to supporting Donald Trump has displeased a portion of California's audience, where a significant number of buyers traditionally hold more liberal views.
- Lack of notable updates to the model range - despite the launch of an updated version of the Model Y, demand for it in the US fell 15 per cent in the second quarter.
- Increased competition: European and Asian brands, including China's BYD, Xpeng and Geely, are increasing market share in the US.
Globally, Tesla is also struggling: the company's global deliveries fell 13.5 per cent in the second quarter of 2025. China's BYD, on the other hand, sold 1.1 million vehicles in the same period compared to Tesla's 384,000.
Tesla has launched a number of incentive programmes: rebates, zero interest rates on loans, free use of Full Self-Driving and Supercharger charging until September. Tesla is also increasing its focus on developing unmanned taxis, autonomous systems and robotic platforms. However, analysts are increasingly questioning the company's ability to maintain its leadership amid competition and changing consumer sentiment.
Source: Electrek