Tesla sales have peaked in California, industry group predicts

Tesla sold fewer vehicles in California for the second straight quarter, suggesting its popularity in the state may have peaked, according to a report from the California New Car Dealers Assn.

While the electric car company still makes some of the top-selling models in California, overall Tesla registrations declined by 7.8% in the first quarter compared with a year earlier, the trade group said Monday. Tesla registrations slid 9.8% during the final quarter of last year.

Tesla’s share of California’s electric vehicle market has dropped 6.4 percentage points to 55.4%, the report said. New battery-powered models from luxury car makers Mercedes and BMW, meanwhile, helped those companies gain ground in California, although electric vehicles’ share of the overall market shrank slightly during the period.

California’s “love affair with electric vehicle giant Tesla may have peaked,” the car dealers group said in a statement. The company’s dominance is waning, the group said, and “traditional manufacturers are stepping up to the plate.”

The Elon Musk-led EV maker has been under pressure this year from increasing competition and weaker demand across the market. It said last week that it would speed up the release of new, cheaper models while prioritizing Musk’s pursuit of fully autonomous driving technology.

Tesla’s newest model, the Cybertruck, has been ramping up slowly. Sales of the stainless-steel-clad truck weren’t significant enough to be included in the report, but 574 of them were registered in California in the first quarter, according to a trade group spokeswoman, citing Experian Automotive data.

A slowdown in California is noteworthy for Tesla. Though it’s now based in Austin, Texas, the company was started in the Golden State. Silicon Valley’s tech-savvy early adopters and consumers in Los Angeles were key to the company’s early success.

Lower-emissions cars are still on the rise in California. Fully battery-powered, hybrid and fuel-cell vehicles accounted for 37.5% of overall vehicle registrations in the state in the first quarter, up from 11.6% in 2018. Gasoline-powered cars made up 60% of first-quarter car registrations, according to the report.