Tesla was once Californian's favorite car, but now it is taking a beating.
Industry data released on Thursday shows that in the second quarter of this year, Tesla's new car registrations in California fell by 24%, marking three consecutive quarters of decline. This indicates the increasing challenges faced by the electric vehicle leader.
According to a report from the California New Car Dealers Association, Tesla's registrations in California dropped to 52,211 in the second quarter.
During this period, pure electric vehicle sales in California fell by 1.3%. In contrast, sales of hybrid vehicles in the state soared by 22%.
In the first half of this year, Tesla's registrations in California fell by 17%, while competitors such as Hyundai, Kia, BMW, Mercedes-Benz, Ford, and Rivian saw double-digit percentage growth in their sales in the state.
The Tesla Model Y remains the best-selling vehicle in California, but its market share in the first half of this year fell from 64.6% in the same period last year to 53.4%.
Tesla's allure seems to be wearing off, signaling potential trouble for the direct-to-consumer manufacturer, the report said.
California is the largest electric vehicle market in the United States and is also Tesla's largest market in the country, accounting for 10% of Tesla's global deliveries.
On the one hand, high interest rates and fierce competition have weakened demand for electric vehicles, with consumers opting for cheaper hybrid vehicles.
On the other hand, Elon Musk's image has also led potential customers in the United States to avoid purchasing Tesla cars. Musk's support for the Republican Party and his outspoken comments have raised concerns about the Tesla brand, especially in liberal states like California.
Tesla is scheduled to announce its quarterly results next Tuesday. In the second quarter of this year, the number of cars delivered to customers by Tesla fell year-on-year but still exceeded analysts' expectations.