Elon Musk’s Tesla, once the dominant force in California’s electric vehicle market, is experiencing a sharp drop in sales across the state.
Newsweek has contacted Tesla for comment via email.
Why It Matters
California is the biggest market for electric vehicles in the U.S. and by a wide margin, accounting for nearly 35 percent of all EV sales nationwide. Therefore, declining sales in the state could spell trouble for Tesla, which reported its first-ever annual decline in deliveries in 2024.
Last month, President Donald Trump signed an executive order repealing federal rules promoting electric vehicles, which could also hurt Tesla.
Mike Stewart/AP
What To Know
Tesla’s sales have dropped by double digits in California, according to data released by the California New Car Dealers Association (CNCDA).
The Q4 data shows that Tesla saw almost 27,000 fewer electric vehicles delivered in 2024 than in 2023, amounting to an 11.6 percent drop in sales for the company.
Tesla’s drop in sales saw the company’s market share in California drop from 60 percent to 52 percent. It is the fifth consecutive quarter of decline for Tesla in the Golden State.
Nonetheless, Tesla still remains the dominant force in California’s EV market, retaining the highest market share by a long stretch.
California’s EV market has remained relatively unscathed from Tesla’s declining sales, growing by 1.2 percent overall in 2024. And if you exclude Tesla from the equation, the California EV market grew 20 percent in 2024.
But Tesla is still facing problems in the global market. The company saw sales plummet across Europe last year amid backlash among consumers over Musk’s political views. Musk was a vocal supporter and major donor to Trump’s campaign and now heads up the newly created Department of Government Efficiency.
Tesla registered only 1,277 new cars in Germany in January, according to the German Federal Motor Transport Authority, a drop of 59 percent compared with the same month in 2024. The country hosts Tesla’s only manufacturing plant in Europe. Tesla’s decline came amid a 50 percent year-over-year growth in Germany’s EV market in January, reducing its market share from 14 percent to 4 percent.
Musk has been a divisive figure in Germany. While he is regarded as a massive job creator in the country, employing thousands of people at Tesla’s Berlin Gigafactory, he has also sparked controversy since he bought Twitter in 2022, owing to his use of the platform to voice his support for right-wing political parties across Europe.
Musk hosted a discussion on X with Alice Weidel, the leader of Germany’s far-right AfD party, in which she falsely claimed that Adolf Hitler was a socialist. Musk is now one of the richest and most powerful supporters of the AfD. The AfD party has been accused of Nazi sympathies.
The Tesla CEO has also been accused of amplifying antisemitism on several occasions since he bought Twitter, accusations he denies.
Amid Musk’s support for the AfD, an entrepreneur from the south-west state of Baden-Württemberg told German media that he had been “completely overrun” with orders for a sticker he produced for Tesla owners that read: “I bought this before Elon went crazy.” He said he had received as many as 2,000 orders in a single weekend.
And Germany is not the only European country where Tesla has seen declining sales. In France, Tesla sales dropped 63 percent in January, while registrations fell 38 percent in Norway and 8 percent in the U.K. compared to the previous year, the Financial Times reported.
Amid declining sales, Tesla saw its first annual delivery volume decline in a decade in 2024. This month, Tesla raised the prices of its Model X cars in the United States by $5,000 after increasing the price of the cars by the same amount in December, according to the company’s website.
The Model X all-wheel drive will now cost $84,990, a jump from its previous price of $79,990, the EV maker said, adding that the plaid variant, which was priced at $94,990, will now cost buyers $99,990. Tesla did not provide a reason for the price increase.
What People Are Saying
CNCDA said: “Things aren’t looking so golden for EV automaker Tesla in the Golden State. Tesla’s dominance in the electric vehicle market continues to falter as the brand reported its fifth consecutive quarterly registration decline. Tesla’s registrations fell 7.8 percent in Q4 2024, contributing to an overall 11.6 percent decline in 2024. The company’s market share also dropped by 7.6 points in 2024, now holding 52.5 percent of the Zero Emission Vehicle (ZEV) market for the year. Amongst all brands, Tesla’s share of California’s market is 11.6 percent, down from 13 percent in 2023.”
What Happens Next
Whether Tesla’s sales will continue to decline in California and Europe remains to be seen.
