Tesla’s California registrations plunge three quarters in a row, dealer data shows

2:31 pm Thursday, July 18th, 2024

(Reuters) -Registrations of Tesla cars in California fell for the third consecutive quarter in the April-to-June period, indicating mounting challenges for the EV maker, according to a report by the California New Car Dealers Association on Thursday.

High interest rates and stiff competition have led to subdued demand for electric vehicles as consumers opt for less expensive hybrid cars.

Potential Tesla customers in the United States have been shying away from buying its electric cars, partly due to CEO Elon Musk’s polarizing persona.

Musk’s embrace of Republicans and controversial comments have sparked concerns about Tesla’s brand, especially in liberal states such as California, which accounts for 10% of the firm’s global deliveries.

The world’s richest man publicly endorsed former President Donald Trump for the first time in the U.S. presidential race after the assassination attempt on the Republican candidate on Saturday.

The electric-vehicle maker’s Model Y crossover continues to be the best-selling model in the state, but its market share in the first half of the year fell to 53.4%, from 64.6% in the corresponding year-ago period.

Tesla’s registrations in the state were about 24% lower in the second quarter.

Its market share in the BEV market in California fell to 51.5% in the second quarter from a year ago, according to a Reuters calculation based on the data.

From January to June, Tesla saw its registrations in California slump 17%, even as distant rivals such as Hyundai Motor, Kia Motors, and BMW, Mercedes-Benz, Ford, as well as Rivian increased sales by double-digit percentage points.

“Tesla’s allure seems to be wearing off, signaling potential trouble for the direct-to-consumer manufacturer,” the report said.

Meanwhile, the market share of hybrid vehicles rose to 13.4% in the three months to June, from 10.8% a year ago. Battery electric vehicles commanded 21.9% of the market, marginally higher than 21.8% a year ago.

Tesla, which is set to report quarterly results on Tuesday, handed over more vehicles to customers in the second quarter than analysts had expected, although deliveries were lower than a year ago.

(Reporting by Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Editing by Shounak Dasgupta and Vijay Kishore)