Industry data released on Thursday showed that Tesla (TSLA.US) registered 24% fewer vehicles in California in the April-to-June period, marking the third consecutive quarter that the electric vehicle maker has seen sales decline in its key market, as challenges mount for the company.
As consumers opt for cheaper hybrid vehicles, high interest rates and fierce competition have weakened demand for electric vehicles.
Potential Tesla buyers in the United States have been avoiding the company’s vehicles, in part because of the polarizing image of its chief executive, Elon Musk.
Musk’s support for Republicans and his outspoken comments have raised concerns about the Tesla brand, particularly in liberal states such as California, which accounts for 10 per cent of the company’s global deliveries.
Mr Musk publicly endorsed the Republican candidate Donald Trump for the first time on Saturday, after Mr Trump survived an attempted assassination last week.
According to a report from the California New Car Dealers Association, Tesla registered 5,211 vehicles in the state in the second quarter, down from 6,110 in the first.
Its share of the pure electric market fell 1.3 per cent in the period, while the hybrid market surged 22 per cent.
The report said: “Tesla’s appeal seems to be waning, which suggests the direct-to-consumer manufacturer may be in trouble.”
From January to June, Tesla’s registrations in California fell 17 per cent, while its competitors, including Hyundai, Kia, BMW, Mercedes-Benz, Ford and Rivian, saw sales double-digit growth.
The company’s Model Y remained the most popular vehicle in the state, but its share of the market fell from 64.6 per cent in the first half of last year to 53.4 per cent.
Meanwhile, according to registration data from the European Automobile Manufacturers Association, Tesla’s share of the European market also fell slightly, ranking it 10th in market share with 2.2 per cent.
Tesla is due to release its latest quarterly results on Wednesday, after delivering 443,956 vehicles in the second quarter, above Wall Street’s expectations of 439,900 but down about 4.8 per cent from the 466,000 delivered in the same period last year.