Tesla's California Market Share Plunges to 9.9%, Marking Its Steepest Drop in 2025

Tesla has experienced a significant decline in its home state of California. According to data released on January 22 by the California New Car Dealers Association, Tesla accounted for 9.9% of new vehicle registrations in the state in 2025, down notably from 11.6% in 2024—marking the largest annual market share drop among all brands, more than triple that of Dodge. Its ranking in California also slipped from second to third. Key factors behind the sales decline include an aging product lineup, underwhelming performance of the Cybertruck, intensifying competition from mainstream automakers’ electric models, the elimination of federal EV tax credits, and backlash from some consumers over Elon Musk’s political stances. Tesla registered fewer than 180,000 vehicles in California in 2025, down from 203,000 the previous year, contributing to a slight dip in the state’s total zero-emission vehicle (ZEV) registrations to 378,000. Despite the overall decline, the Model Y remained California’s best-selling electric vehicle, while the Model 3 ranked second among all passenger cars. To boost demand, Governor Gavin Newsom plans to allocate $200 million to revive the state’s EV purchase rebate program.