Tesla Car Registrations In California Fall For Third Consecutive Quarter

Tesla sales may not be doing so well, as industry data showed that registration of its cars in California dropped for the third consecutive quarter, with the latest dip being a substantial 24%.

The low sales is another indicator of the growing issues that the company has been facing, such as stiff competition and high interest rates.

Several consumers, who wanted to buy the hybrid vehicle, may opt for the cheaper options that could still give them the same benefit, Reuters reported.

In the second quarter, the California registrations fell to 52,211, based on a report by the California New Car Dealers Association (CNCDA). In the same period, the sales of batteries for electric vehicles slipped a bit at 1.3% and, overall, sales of hybrid vehicles rose by 22%.

"Tesla's allure seems to be wearing off, signaling potential trouble for the direct-to-consumer manufacturer," the CNCDA report stated.

Brian Maas, president of the CNCDA, told Fortune that the two models of Tesla, Model 3 and Model Y, were basically the same cars as they were five years ago. He also added that if the company could not offer new models to attract customers, buyers will be looking for other alternatives.

More manufacturers of EVs have also entered the market. In fact, the analysis of CNCDA found the Hyundai Ioniq 5 to be the third best-selling EV in California.

A breakdown of the Tesla sales in California would show that from January to June, registrations dipped by 17%. Meanwhile, its rival companies that also manufacture EVs, like BMW, Hyundai, Kia, Mercedes-Benz and Ford, saw an increase in their sales by 2-digit percentage points.

The Model Y of Tesla continues to be the best-selling model in the state. However, during the first half of the year, its market share fell to 53.4%, which is a drop of more than 10% compared to last year's 64.6% in the same period.

According to the report, the "polarizing persona" of Tesla's CEO Elon Musk has also been one of the reasons why buyers tend to shy away from Tesla. Musk has openly endorsed Republican candidate, former president Donald Trump, after the attempted assassination at the Pennsylvania rally. This openness, however, has given rise to concerns about the Tesla brand, especially in California, which is considered as a liberal state and where the 10% of the global deliveries is situated.

The headquarters of Tesla moved from California to Texas in 2021. Musk also announced that SpaceX and X would also be moving to Texas since he and Governor Gavin Newsom could not see eye to eye over a bill that concerned transgender kids.