California New Car Dealers Association Releases Q1 2024 Auto Outlook Report: The Decline of Tesla Sales and the Impact of Elon Musk’s Political Views

The end of a love affair between Californians and Elon Musk seems to be on the horizon as Tesla sales in the state have taken a significant hit. According to the latest analysis by the California New Car Dealers Association (CNCDA), Tesla sales in California dropped 24.1% in the second quarter of 2024, marking the brand’s third consecutive quarterly decline.

One of the key factors contributing to this decline, as explained by Brian Maas, president of the CNCDA, is the lack of new models from Tesla to entice customers. The Tesla Model 3 and Model Y have remained largely unchanged for the past five years, leading buyers to explore other options in the market. Additionally, increased competition from other automakers offering lower costs, newer cars, and greater variety has eroded Tesla’s market share in the electric vehicle (EV) segment.

Interestingly, the analysis found that California car buyers are now turning to battery-electric vehicles (BEVs) from brands like Toyota, Hyundai, and Ford, whose BEV registrations have seen significant growth this year. The Hyundai Ioniq 5, in particular, has become the third best-selling EV in California, surpassing the Tesla Model X.

Moreover, Elon Musk’s reported political affiliations and donations to a pro-Trump Super PAC have not gone unnoticed by Californians, where a majority of registered voters are Democrats. This could potentially be contributing to the decline in Tesla sales in the state, with more Democrats showing a willingness to buy vehicles from other brands.

Despite these challenges, Tesla remains the top-selling brand in California’s new-vehicle market for BEVs and plug-in hybrids, with the Model Y and Model 3 leading the pack. However, the rise in popularity of other BEV models indicates a shifting landscape in the state’s automotive market.

While it’s difficult to directly link Musk’s political views to buying trends, the impact of his public statements and affiliations on consumer behavior cannot be ignored. As Maas points out, consumer preferences are often driven by factors such as durability, features, safety, and affordability, rather than a CEO’s personal beliefs.

As Californians continue to embrace BEVs at a higher rate than the national average, the future of Tesla’s sales in the state remains uncertain. Whether Musk’s political views will further impact the brand’s performance or if Tesla will introduce new models to regain market share, only time will tell.