When does a sales-growth downturn move from a temporary blip to a longer-term trend? Maybe right now.
After years of rapid growth, electric vehicles sales growth in California trended flat in the middle of last year and the trend continues: 101,443 all-electric cars were registered in the state in the year’s second quarter, down from 102,730 in the second quarter of 2023, a drop of about 1%.
The market share of all-electric cars is flat, too, at 21.4% of all auto sales for the first half of the year, down slightly from last year’s first half, according to the California New Car Dealers Assn.
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Tesla, once the darling of California car buyers, was hit hard. While still by far the EV sales leader, Tesla’s California sales plunged 24.1% in the second quarter. Nationally, according to Kelley Blue Book, Tesla sales dropped 6.3% for the second quarter, even as total EV sales climbed 7.3%.
There’s no hard data to suggest why Americans, and Californians in particular, are turning against Tesla. But the Tesla trend in the Golden State doesn’t look good.
Tesla “is facing mounting challenges. Its market share dipped 2.3 points from last year. … Tesla’s allure seems to be wearing off, signaling potential trouble for the direct-to-consumer manufacturer,” the car dealers group said in a press release.
Tesla famously sells directly to customers and doesn’t use car dealers, so a bit of dealer group schadenfreude can be expected. But the numbers the group released are reliably produced by industry-standard data collection from Experian Automotive.
Besides Tesla, other second-quarter EV losers include Volvo, down 66.5%, and Polestar, down 61.9%. Both brands sell EVs made in China, hit hard by heavy Biden administration tariffs. Volkswagen was down 34.5%. Chevrolet was down 50.6% — but that’s mainly because it discontinued the popular Chevy Bolt EV, with promises to reintroduce a new version. If the Bolt had still been on sale, there’s a good chance the statewide EV sales would be in positive territory.
Winners include Audi, up 77.4%; BMW, up 59.5%; Kia, up 72.3%, and Toyota, up 108% — although those increases come off a fairly small sales base.
Overall California auto sales were up 4.8% in the second quarter. Gasoline-battery hybrids are a bright spot — up 21%. Sales of plug-in hybrids, which can drive a few dozen miles on batteries alone, fell slightly.
If the flat EV sales trend continues, it could mean trouble for Gov. Gavin Newsom’s EV mandate: By 2035, auto manufacturers will be allowed to sell only electric cars in California, 80% of them all-electric, 20% plug-in hybrids.
