Tesla sales slump in California even as car buying surges ahead of tariffs

Core Insights - Tesla's dominance in California's electric vehicle market is declining, with a 15.1% drop in registrations in early 2025, marking the steepest quarterly loss in over a year, despite an overall increase in new car registrations by 8.3% year over year [1][2] - Tesla's market share in California's electric vehicle sector fell from 55.5% to 43.9% between Q1 2024 and Q1 2025, indicating increased competition and an aging product lineup [2] - The company's first-quarter delivery numbers were 13% lower than the same period last year, representing the worst quarter since early 2022, and Tesla's stock has decreased by 35% year-to-date [6] Market Dynamics - California remains a crucial market for Tesla, being the largest EV market in the US and the company's birthplace, but the relationship between Tesla and the state has deteriorated in recent years [3] - Elon Musk's relocation of Tesla's headquarters to Texas in 2021 and his alignment with right-wing figures have led to public clashes with California's Democratic leaders, contributing to a negative perception of the company in its home state [4] - Demonstrations against Musk's political involvement have increased, with Tesla vehicles making up 1.4% of all trade-ins in California, a significant rise from 0.4% a year earlier, indicating changing consumer sentiment [5]