Even though Elon Musk has said numerous times that he is not going to support either of the presidential candidates this year, the famous businessman has become extremely vocal in recent weeks, attacking Democrats for their far-left policies, especially how the White House and the Biden administration have handled the immigration crisis in the past few years. Although this isn’t direct support for Trump during the presidential campaign, it’s clear that Musk agrees with former President Donald Trump, at least when it comes to some of the most important issues that bother millions of Americans.
At a time when Musk is more focused on free speech policies and accusing American leaders of the current state of America, he is accused of spending less time focusing on his multi-billion-dollar businesses, including the EV leader Tesla. Tesla’s shares have been going up and down in value since the pandemic, but shareholders and Tesla fans also find some of Musk’s recent moves to blame for the slower-than-expected growth the brand has recently experienced. Musk and Tesla now pay the price in California, which is considered the largest EV market in America and the state with the most developed rapid charging station network.
The numbers
Among the top three passenger cars sold in California in the first quarter this year, Elon Musk’s Tesla Model 3 dropped from first place to third, behind the Toyota Camry and the Honda Civic, according to the California New Car Dealers Association’s first quarter auto outlook on Monday. Toyota was the top brand in California this quarter, notching a 9.3% increase in registrations, followed by Honda, which marked an 18.6% rise so far this year. Tesla registrations have dropped in California year to date, with a 7.8% drop in the first quarter, following a 9.8% drop in the last quarter of 2023.
California is an EV leader
California accounts for 32.5% of all electric vehicle registrations in the U.S., but Tesla’s appeal seems to be waning among those buying new cars. This dip in popularity is happening at a tough time for Tesla and its CEO, Elon Musk. Investors are pushing Musk to behave more like a traditional CEO, reduce his prominent use of social media, and set a clear schedule for the release of a more affordable Tesla model. The company recently announced a 9% drop in revenue, the biggest decrease since 2012, and a 55% fall in net income for the first quarter. Additionally, the resignation of three senior executives, including the well-known Drew Baglino, over two weeks has left investors feeling uneasy.
The explanation
The California New Car Dealers Association (CNCDA), which monitors trends in the state’s new-vehicle market with data from Experian Automotive, expressed concerns about Tesla’s current market position. “Californians’ love affair with electric vehicle giant Tesla may have peaked,” stated the CNCDA on Monday.
“The numbers don’t lie,” said Brian Maas, president of the CNCDA. “They indicate that the incredible growth that Tesla had for years has now stopped or certainly slowed in the most recent report.”
Tesla faces a challenge
The share of the market for battery electric vehicles dropped slightly from 21.5% in 2023 to 20.9% in the first quarter, according to the group’s findings. This decrease in sales could be attributed to several factors including the higher price of Teslas compared to other cars, problems with charging stations, or the possibility that most people interested in owning a Tesla have already bought one.
“Appealing to the mass market is a challenge Tesla faces,” said Maas. “Other dealers have a broader array of very competitive vehicles, so Tesla doesn’t have the EV space largely to their own like they did a few years ago.”
Read also: California home insurance crisis is about to become worse as Democratic leaders fail to fix things
Moving to Texas and supporting right-wing conspiracy theories
Another issue potentially affecting Tesla’s sales is Elon Musk’s behavior and public statements. A report by Caliber, a market-intelligence firm, noted a significant drop in consumer interest in Tesla, from 70% in November 2021 down to 31% by February 2024. This decline has been partly linked to Musk’s endorsement of controversial political stances and his move from California to Texas. In California, where the political landscape leans significantly Democratic, Musk’s actions might be especially off-putting.
