Tesla Faces 7th Straight Quarter Of Falling California Registrations

Electric vehicle (EV) manufacturer Tesla experienced a significant 21.1 per cent decline in vehicle registrations across California during the second quarter, extending a troubling trend that has now persisted for seven consecutive quarters in one of America's most important EV markets, news agency Reuters reported on Wednesday.

What Impacted Core Performance

The Austin-based automaker's declining performance in the Golden State coincides with CEO Elon Musk's increasingly controversial political positioning, which appears to be creating friction with California's predominantly liberal consumer base that has historically driven Tesla's success.

The billionaire entrepreneur's recent announcement of the America Party formation this month followed highly publicised disputes with President Donald Trump, raising questions about the impact of his political engagement on Tesla's business operations.

What Registration Data Says

Data from the California New Car Dealers Association shows Tesla recorded 41,138 new vehicle registrations during the April-June period, representing a substantial decrease from the 52,119 units registered during the corresponding quarter in 2024.

"Seven appears unlucky for Tesla, as this is the most recent number of quarterly registration declines reported in the state," the CNCDA said in a statement, as per the Reuters report.

Production Challenges

The registration decline occurred despite Tesla implementing a production shutdown earlier this year to update its popular Model Y crossover and introducing more affordable variants during the second quarter. The company has not yet responded to requests for comment regarding the California market performance.

Market Leadership Remains

Even with the registration drop, Tesla's Model Y and Model 3 vehicles maintained their positions as the top-selling zero-emission and hybrid vehicles in California through June, demonstrating the brand's continued market relevance despite overall performance challenges.

Global Sales

Tesla's California struggles reflect broader company challenges, with global vehicle deliveries falling 13.5 per cent in the second quarter, positioning the company for another year of contracting sales volumes.

Hybrid Competition Intensifies

Meanwhile, hybrid vehicle registrations surged 54 per cent during the first six months of the year, capturing 19.2 per cent of the California market as consumers increasingly explore alternative powertrain options beyond pure electric vehicles.

Cybertruck Shows Promise

Despite overall registration declines, Tesla's Cybertruck electric pickup managed to secure 3,622 registrations in California during the first half of 2025, according to CNCDA data, suggesting potential bright spots for the company's expanding product lineup.

Investor Concerns Mount

Market analysts and Tesla investors have expressed growing concerns that Musk's political activities may be diverting attention from operational priorities at a critical time when the company faces intensifying competition in the electric vehicle sector.

The company is scheduled to release its quarterly financial results following Wednesday's market close, which may provide additional insight into the impact of these market challenges on Tesla's overall performance.