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FinanceTesla

Tesla sales decline in California with Model 3 plunging 36%

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February 3, 2025, 3:16 PM ET
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Elon Musk gestures as he arrives to visit the construction site of Tesla on September 03, 2020 in Gruenheide near Berlin.ODD ANDERSEN—AFP via Getty Images
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Tesla Inc. registered fewer cars in California in all four quarters of 2024, as sales of its second-most important model plunged 36% for the year.

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The electric-vehicle maker’s sales in by far the biggest EV market in the US fell almost 8% in the fourth quarter and 12% for the year, according to data sourced by the California New Car Dealers Association. Annual registrations of the Model 3 sedan dropped by more than a third.

Tesla’s registrations declined despite the company adding a fifth model — the polarizing Cybertruck — to its lineup last year. While more common business factors also came into play, including changing over the Model 3 sedan early in the year, the company likely lost some business in California as a result of the active role Chief Executive Officer Elon Musk played in the US election.

Musk, 53, spent at least $288 million to help elect Donald Trump and other Republican candidates during the 2024 cycle. California went for Democratic nominee Kamala Harris by 20.2 points in November.

Tesla’s reputation has taken a hit among some US consumers recently. Survey scores measuring the trust and likability sentiment surrounding the EV maker touched their lowest level since at least 2023 in November and January, according to data provided by Caliber, a brand reputation analytics firm.

Tesla did manage to maintain a majority of California’s zero-emission vehicle registrations last year, although its share dropped to 52.5% from 60.1%. All models across the Austin-based company’s aging lineup fell for the year, with the exception of the Cybertruck, which began selling in late 2023.

Honda Motor Co. and [hotlink]Hyundai Motor[/hotlink] Co. were the biggest gainers in the EV segment, adding 1.8 and 1.5 percentage points of share, respectively.

Musk moved Tesla’s headquarters out of California in 2021 after defying lockdown policies during the pandemic. One of the company’s two EV assembly plants in the US is in Fremont, in the San Francisco Bay area.

In July of last year, he announced that his companies X and SpaceX would also leave the state for Texas, citing a new law Governor Gavin Newsom signed that banned school districts from requiring teachers to notify parents of changes to a student’s gender identity.

After the election, Newsom threatened to exclude Tesla from EV rebates that the state may offer if Trump follows through with threats to repeal federal tax credits for consumers.

(Updates with consumer sentiment survey findings in the fifth paragraph.)

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