Tesla sales are nosediving in California, and it's dragging the state's entire EV market down

Core Insights - Tesla's vehicle registrations in California fell over 20% in Q2 compared to the previous year, marking the seventh consecutive quarterly decline in the state, despite overall new car sales growth [1][2] - The decline in Tesla's sales is attributed to brand damage from CEO Elon Musk's political involvement and increased competition in the EV market [2][8] - Tesla's global deliveries also fell by approximately 13.5% in Q2, indicating broader challenges beyond California [3] Sales Performance - Zero-emission vehicles represented 18.2% of new car sales in California in Q2 2025, down from 22% in 2024, highlighting a negative trend in the state's EV market [2] - Tesla's refreshed Model Y has not significantly boosted sales, and the Cybertruck, launched in 2023, has sold only 11,000 units this year [9] Competitive Landscape - Tesla faces fierce competition and a lack of new product offerings, with no new models introduced since the Cybertruck [8][9] - Recent legislation is set to end the $7,500 tax credit for new US-made electric cars in September, adding pressure on Tesla's sales [10] Strategic Responses - In response to declining sales, Tesla has introduced new incentives, including free supercharging for certain Model 3 purchases and free Full Self-Driving transfers [10]