Tesla’s reign in California wavers as car sales drop 12% in 2024

Tesla’s electric vehicle registrations in California plunged by 12% in 2024, marking its fifth straight quarterly decline, according to a report by the California New Car Dealers Association. The fall underscores the challenges facing the EV giant in one of its most critical markets.

Economic hurdles such as rising interest rates and increased competition contributed to the drop, with the Model 3 sedan experiencing a sharp 36% dip in sales. Tesla’s global deliveries also slipped last year for the first time, as the brand faces stiff competition from Chinese and European automakers.

However, the Model Y crossover remained a bright spot, retaining its title as California’s best-selling vehicle with 129,000 units sold. In contrast, the Model 3 lagged behind, with around 53,000 units delivered.

“Tesla’s dominance in the EV market is clearly waning,” the association stated. “High borrowing costs and economic uncertainty have hurt affordability, pushing potential buyers toward alternatives.”

Political developments may have worsened Tesla’s challenges. Reports suggest the Trump administration’s proposal to scrap the federal $7,500 EV tax credit further dampened market confidence. While California’s Governor Gavin Newsom has hinted at potential state-level tax credits, Tesla’s eligibility remains uncertain.

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