Elon Musk, the man who has steered Twitter into the more conservative-centric X, has been locked in an ideological battle with the state of California.
He has many gripes with the liberal Golden State and is not shy about voicing them. But his chickens may be coming home to roost as Tesla sales in California have taken a significant hit.
California’s EV Boom
California is leading the way with regards to drivers adopting electric vehicles (EVs). In 2023, California motorists purchased over 400,000 new EVs.
This makes the state an extremely fertile marketplace for EV manufacturers, and in recent years one brand has been synonymous with the electric auto revolution — Tesla. But there may be trouble ahead for Elon Musk’s company.
Plummeting Tesla Sales
Industry data reveals that demand for Tesla vehicles in the state of California appears to be plummeting.
Based on post-sale registrations recorded when a vehicle’s title is processed, demand for new Teslas nose dived 24% to 52,211 vehicles in the second quarter of this year. This is particularly concerning in a state where more than one in five new cars sold are electric.
A Continuing Trend of Decline
This drop in interest in Tesla marks the third consecutive three-month period of decline compared to last year. Tesla may have reached its peak in 2023 when it hit just over 230,000 vehicles.
The California New Car Dealers Association (CNCDA) may have put it best when publishing the figures: “Tesla’s allure seems to be wearing off.”
Better Fortunes for Rivian
While Tesla struggles, others are prospering and making the most of this opportunity to get a greater foothold in the EV market.
Registrations of competing Rivian EVs rose by an impressive 69% this quarter to just under 4,000 vehicles, positioning Rivian as the fastest-growing major brand in the state of California.
Reasons for Tesla’s Troubles
There are a number of reasons why the makeup of EVs on California’s highways may be changing. Perhaps the market is naturally adjusting to new competition and greater choice for consumers.
Or perhaps Tesla, or rather Elon Musk, might be responsible for its own declining fortunes. Musk may be actively pushing away EV enthusiasts, particularly those in California.
Reactions on Social Media
Musk recently publicly endorsed Donald Trump, investing tens of millions of dollars into Trump’s presidential election campaign.
This is causing some more liberal EV owners to reassess their association with Musk’s brand. A well-known Malibu Tesla owner Miss Jilianne, who frequently posts videos of Full-Self Driving Tesla beta tests to social media, took to X to express her sentiment that it might be time to ditch her Tesla for a Rivian.
Musk’s Identity Crisis
This highlights what might be part of the issue for Tesla — something of a disconnect between Musk’s personality and his identity and how he tries to position his product offerings.
Electric cars are viewed, almost to the level of parody, as a democratic, liberal fancy. Yet it is precisely this customer base that Musk is alienating by doing things like so enthusiastically supporting Trump and positioning X as a strongly conservative platform.
Elon’s California Feud
If Musk seems to be at odds with Democrats in general, then he’s engaged in an all-out feud with the state of California.
Most recently, he announced that he will be moving both SpaceX and X Corp from California to Texas, citing California’s new gender identity law as his reason for doing so.
Tesla Still In a Strong Position, For Now
Tesla is still in a highly dominant position in California’s EV market, despite these recent declines and the gains made by Rivian.
Tesla has a 53% market share in the first half of 2024, meaning all other competitors combined — including Rivian with its 3.6% share — still have fewer EVs on the roads than Tesla.
The Importance of California as an EV Battleground
Even with things still looking healthy currently, Tesla should be concerned about losing ground in California. It’s one of the strongest EV markets in the country, with EVs making up almost three times the new car market in the state compared to the national average.
California is an EV pioneer in many regards, including trialing new road-tax models for electric vehicles that may be adopted by other states. There is a position to be taken that as goes California, so goes the national EV market.
Tesla’s Changing Fortunes
The EV market is growing and is only going to get bigger. For the longest time, it seemed there were only a few names in the electric vehicle marketplace, and Tesla was the most prominent among them.
Tesla’s brand identity is intrinsically linked to Musk’s. When such a conservative figure is synonymous with something as liberal as the EV revolution, it’s no wonder consumers are beginning to feel a conflict and are losing their interest in Tesla.
