Tesla California registrations down 21.1% in Q2

Tesla (NASDAQ:TSLA) registrations in California were down 21.1% in the second quarter, making this the seventh consecutive quarterly decline in registrations for the EV maker in the state.

According to recent data from the California New Car Dealers Association (CNCDA), Tesla (NASDAQ:TSLA) registrations are down 18.3% compared to the first half of 2024, resulting in a 2.9% loss to Tesla’s market share for the quarter.

The CNCDA attributes some of the decline to Tesla’s (NASDAQ:TSLA) lack of a “robust” dealership network for sales support, as well as increased momentum in demand for hybrids with registrations up 54% so far this year, increasing hybrids’ market share to 19.2%. Gasoline and ICE models remain dominant, however, with 57.5% market share in California.

Of the major automakers, Toyota (TM) holds the greatest market share in California with 17.3%, followed by Honda (HMC) at 11%, Tesla (TSLA) at 8.8%, Ford (F) with 7.7%, and Chevrolet (GM) with 6.6%. The top-selling brands so far this year is still the Tesla (TSLA) Model Y with 44,112 registrations, followed by the Model 3 at 31,394 and Toyota Camry with 30,490 registrations.

Tesla’s (TSLA) slump, as well as demand for rival EVs, could change over the next two months, however, as buyers rush to capitalize on the expiring federal EV tax credit. To be eligible for the $7,500 tax credit for new EVs and $4,000 credit for used, buyers must purchase or lease and take delivery of an EV before September 30.

Any sudden burst of demand for EVs is unlikely to change the trajectory of car sales in California, however, as the CNCDA is forecasting a 9% drop in new vehicle registrations in H2 as a result of higher vehicle prices due to tariffs, increasing inflation, lower economic growth, and stagnant household disposable income.