According to data published on January 22 (local time), Tesla's portion of new vehicle registrations in California saw a notable downturn, dropping to 9.9% in 2025 from 11.6% in the previous year. This positions Tesla as the brand experiencing the most substantial decrease in new - vehicle market share within the state, causing it to slip to the third - place ranking.

This downward trend mirrors the difficulties Tesla is encountering in other global markets. The reasons behind this are manifold. Firstly, its product lineup is getting older, lacking the fresh appeal that newer models can bring. Secondly, the Cybertruck has not performed well in terms of sales, failing to meet initial expectations. Thirdly, the market competition has become more intense, with other automakers launching competitive electric vehicles. Additionally, the elimination of tax - credit policies has made Tesla vehicles less financially attractive to consumers. Lastly, some consumers have developed an aversion to Musk's political activities, which has also impacted Tesla's sales.

In the past year, Tesla registered fewer than 180,000 vehicles in California, which has had a dragging effect on the state's electric vehicle market. Nevertheless, the Model Y and Model 3 still maintain a high level of competitiveness in the California market. In an effort to boost demand, the California governor is advocating for a $200 million funding plan aimed at reinstating the state's vehicle purchase subsidy program.