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Home Electric Vehicles

Tesla’s share of California EV market falls below 50% for the first time in years

David Ijaseun by David Ijaseun
April 23, 2025
in Electric Vehicles, Premium
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Tesla sales in California

Tesla sales in California

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Tesla no longer dominates California’s electric vehicle (EV) market. For the first time in years, the automaker’s share of new EV registrations has fallen below 50%, signalling a significant shift in the nation’s biggest EV hub.

According to the California New Car Dealers Association, Tesla captured just 43.9% of the state’s EV market in Q1 2025, a sharp drop from 55.5% during the same period last year. That’s a loss of nearly 12 percentage points year-over-year.

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While Tesla delivered 42,322 vehicles in California during the first three months of the year, sales of rival EVs surged by 35%, buoyed by fresh models and rising consumer appetite for alternatives.

The Tesla Model Y and Model 3 remain the top-selling EVs in the state. However, competitors are gaining traction fast. Honda’s Prologue claimed third place with 4,493 units sold, followed by Hyundai’s Ioniq 5 at 3,762 units. Even Tesla’s much-anticipated Cybertruck ranked only eighth, with 2,282 units registered.

Analysts point to several causes behind Tesla’s shrinking lead. A stagnant product lineup, political backlash against Elon Musk, and manufacturing slowdowns contributed to the dip. Tesla began redesigning its Model Y this quarter, temporarily halting production across global plants.

Meanwhile, the broader auto industry faces headwinds from President Trump’s new 25% import tariff. While Tesla assembles most of its U.S. cars in California and Texas, some imported components may soon face higher costs, adding uncertainty to its supply chain.

Globally, Tesla’s Q1 vehicle deliveries fell to their lowest level since mid-2022, continuing a trend of slowing demand that began last year. Increased competition from brands like Hyundai, Kia, and Ford—paired with more affordable pricing and incentives—has further chipped away at Tesla’s market lead.

The shift marks a turning point in California, which accounts for nearly one-third of all EV sales in the U.S. Consumers now have more choices than ever before—and they’re beginning to look beyond Tesla.

Read more on Musk’s political controversies drive down Tesla’s European market share

Tags: EVHeadlineLuxury carsTesla

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