This could be the end of an unrequited love. Elon Musk has been a staunch critic of California and has promised to move Tesla, SpaceX and X to Texas. In turn, Californians are turning their backs on Musk.
Tesla’s sales in California fell 24.1% in the second quarter, marking the brand’s third consecutive quarter of decline in the state. Purchase volume fell by 7.8% in the first quarter of 2024 and by 9.8% in the fourth quarter of last year. According to the latest analysis of new car registrations released by the California New Car Dealers Association (CNCDA), Tesla sales in California are down 17% so far this year compared with last year. California car buyers are no longer buying the Teslas of Musk’s $793 billion electric vehicle empire, but instead buying battery electric vehicles (BEVs) from Toyota, Hyundai and Ford. The analysis found that Toyota’s pure electric vehicle registrations have surged 108.1% so far this year, while Hyundai and Ford’s pure electric vehicle registrations have increased by 65.7% and 26.4% respectively.
CNCDA Chairman Brian Maas said there are many reasons for Tesla’s sales decline wealth. The Tesla Model 3 and Model Y are essentially the same cars they were five years ago, and buyers interested in these cars likely represent a limited slice of the market, and they likely already own a Tesla. Without new models to attract consumers, buyers will look elsewhere for new cars, he said. He explained that while Tesla dominates the electric vehicle market, over the past few years competitors have rushed in and chipped away at the company’s share with lower costs, newer cars and more variety. . CNCDA analysis found that the Hyundai Ioniq 5 has now become the third best-selling electric car in California this year, taking control of the third place from the Tesla Model X.
While these figures are based solely on California registrations, the branding could work against Musk. About 46.9% of registered voters in California are Democrats, and 23.9% of registered voters are Republicans. According to data from reputation management firm Caliber, more Republicans trust and like Musk than Democrats. Importantly, however, more Democrats are willing to buy Teslas, likely because Democrats are more likely to prioritize electric vehicles over gasoline-powered vehicles, Caliber CEO Shahar Silbershatz told us wealthEva Roitberg.
Now, staunchly “Blue California” learns of Musk’s $45 million monthly donations to pro-Trump super PACs and his support for the former president and Republican nominee. That may not bode well for already declining sales, and the Hyundai Ioniq’s rising popularity could be the first act of a blue rebound.
“When brands shift, there’s always an impact on consumer behavior,” Maas said.
To be sure, Tesla remains the car of choice in California. In the pure electric vehicle and plug-in hybrid new car market, the best-selling car is the Tesla Model Y. The second best-selling pure electric vehicle and plug-in hybrid model is the Model 3. According to Experian data, California’s pure electric vehicle market share is 21.4%, while the overall pure electric vehicle market share in the United States is 7.5%.
Maas believes it’s difficult to connect Musk’s political views to buying trends without detailed research. Sluggish Tesla sales are more likely because the cars haven’t been improved or updated in years and people are investing in durability, functionality, safety, and affordability rather than a CEO mentality.
“Mr. Musk’s political views may change tomorrow. “That being said, I don’t think the impact is zero. “
