Tesla's Q2 California Sales Plummet 21.1%, Rival Rivian Also Sees Decline

Tesla's vehicle registrations in California dropped 21.1% in Q2, marking the seventh consecutive quarter of decline. The company's sales struggles in the state may be due to CEO Elon Musk's increasingly political behavior clashing with California's liberal values. Other EV brands, such as Rivian, are also facing challenges. Investors await Tesla's Q2 earnings results on July 23 for clues on how the company plans to tackle its problems.

Tesla's (NASDAQ: TSLA) electric vehicle registrations in California fell by 21.1% in the second quarter, according to data from the California New Car Dealers Association. This marks the seventh consecutive quarter of decline in the crucial U.S. market [1].

The Texas-based automaker recorded 41,138 vehicle registrations in California during the April-June period, down from 52,119 units in the same quarter of 2024. Despite the decline, Tesla's Model Y crossover and Model 3 sedan maintained their positions as the top two vehicles in the zero-emission and hybrid vehicle category for the first half of 2025 [1].

The industry association noted that sales of hybrid vehicles were gaining ground in the California market, potentially contributing to Tesla’s registration decline. This trend is significant as it highlights the increasing competition in the electric vehicle market [1].

The decline in Tesla's vehicle registrations in California comes amidst growing concerns about CEO Elon Musk's polarizing political activity. Musk's formation of the America Party and his public fallouts with President Donald Trump have raised investor concerns that his political involvement may distract from Tesla's core operations [2].

Tesla's struggles in California are not isolated. Rivian Automotive Inc. (RIVN.O), another electric vehicle maker, also experienced a 28.6% second-quarter decline in registrations in the state [2].

Investors will be closely watching Tesla's Q2 earnings results, scheduled to be released after markets close on Wednesday, July 23. The company's financial performance and strategic plans will be crucial in understanding how Tesla intends to address its current challenges [3].

References:
[1] https://au.investing.com/news/stock-market-news/teslas-california-ev-registrations-drop-211-in-second-quarter-93CH-3937304
[2] https://www.reuters.com/business/autos-transportation/teslas-california-sales-down-seven-straight-quarters-2025-07-22/
[3] https://www.independent.co.uk/bulletin/news/tesla-diners-los-angeles-supercharger-b2793363.html