Tesla has seen a dip in its market share in the United States’s largest market for its vehicles—California—amid increasing competition from other manufacturers, according to a new report. The California electric vehicle (EV) market in 2024 is characterized in the report by a mix of challenges and opportunities.
While Tesla saw a dip in its market share in the second quarter of this year, it remains a key player in the battery electric vehicle (BEV) segment.
The report, released on July 18, finds that Tesla has long been a dominant player in the BEV segment while plug-in hybrid EVs (PHEVs) from other manufacturers have begun to take a larger market share.
The emergence of strong competitors such as Rivian, Hyundai, and Ford indicates a healthy and growing market with increased consumer choice.
In the first half of 2024, Tesla’s new vehicle registrations in California totaled 102,106, down from 123,006 during the same period in 2023, marking a significant decline of 17 percent, according to the report. Despite this decline, Tesla continues to hold a significant portion of the BEV market.
The Tesla Model Y remained the best-selling BEV with 69,810 registrations year to date through June, followed by the Tesla Model 3 with 21,050 registrations.
However, the report also notes that Tesla’s market share dipped 2.3 points from last year, and second-quarter 2024 registrations plummeted 24.1 percent compared to second quarter 2023. This marks Tesla’s third consecutive quarter with registration declines, which the report questions whether or not is a sign that Tesla has “peaked” in California.
The report highlights the emergence of strong competitors that are making notable gains in the BEV market.
Rivian, Hyundai, and Ford have all increased their market presence in the Golden State. Rivian, in particular, has seen a substantial rise in registrations, up by 76.7 percent in the first half of 2024 compared to the same period in 2023.
Similarly, Hyundai’s Ioniq 5 and Ford’s Mustang Mach-E are gaining traction among consumers, offering alternatives to Tesla’s lineup. The Hyundai Ioniq 5 notably took third place in the top-selling EVs in California with 7,191 registrations.
As of the first half of 2024, California accounted for 33.0 percent of all BEV registrations in the United States, underscoring its role as the largest and most influential market for electric vehicles, though internal combustion engines (ICEs) still hold the largest market share.
Combined sales of BEVs, PHEVs, hybrids, and fuel cell vehicles accounted for 38 percent of the market share in California, while ICE vehicles accounted for 62 percent.
“It’s an exciting time to be a franchised car dealer in California. With new competitive EV models and the latest ICE options, we’re able to meet diverse customers’ needs and provide the support they want from their local dealership,” says David Simpson, CNCDA chairman and owner of Simpson Buick GMC Cadillac of Buena Park, Simpson Chevrolet of Garden Grove, and Simpson Chevrolet of Irvine, each in Southern California. “Our dealers are trusted community partners, providing Californians with high-quality, reliable vehicles—whether electric, traditional, or anything in between.”.
Several economic factors are working to influence market dynamics, according to the report.
Higher interest rates have led to elevated monthly finance and lease costs, impacting overall vehicle sales. However, falling vehicle transaction prices and rising household incomes are positive trends that may support future market growth.
In addition, the average age of vehicles in operation has reached an all-time high, encouraging many vehicle owners to consider upgrading to newer models with advanced safety features and alternative powertrains.
California’s franchised new car and truck dealers account for more than 67 percent of combined sales for all alternative powertrain types this year, demonstrating consumer confidence in local dealerships and mainstay brands. This trend is evident in the sales of BEVs by franchised dealerships, which have surged by 27 percent, while direct sellers, such as Tesla and Rivian, saw a 12.3 percent drop.
The Epoch Times reached out to Tesla for reaction to the report but did not hear back prior to publication.
