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Tesla Loses Most Market Share in California EV Market in 2025
Registrations Fell Sharply Last Year, Pushing Tesla to No. 3 as Competition, Fewer Incentives and Backlash Weigh on Demand
Tesla Inc. shed by far the most new-car buyers in California last year, showing how the electric vehicle maker is losing ground in one of the world’s largest EV markets.
The company accounted for 9.9% of all vehicles registered in the state last year, down from 11.6% in 2024, according to Experian data published by the California New Car Dealers Association. The drop was more than three times that of Stellantis NV’s Dodge brand, leaving Tesla as the No. 3 auto brand in the state in 2025, after trailing only Toyota Motor Corp.’s namesake unit the prior year.
The downturn echoes Tesla’s struggles in other markets around the world. The company’s aging lineup and its slow-selling Cybertruck faces growing competition from fresher EVs offered by mainstream carmakers, while the loss of federal tax credits for US EV purchasers has put more pressure on demand that was already faltering. Tesla has also contended with a consumer backlash to Chief Executive Officer Elon Musk’s political activities.
RELATED: Tesla Loses EV Crown to BYD After Second Annual Sales Drop
Tesla registrations in California fell below 180,000 vehicles last year, down from nearly 203,000 in 2024. The decline was enough to put the state’s overall EV market into retreat, with total zero-emission vehicle registrations falling by about 7,300 cars to a little more than 378,000.
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Still, Tesla’s most popular models remained among the state’s top-selling vehicles. The Model Y SUV remained the best-selling EV in the state and was the No. 1 light truck of any type. Tesla’s Model 3 sedan was the state’s second-best selling passenger car, trailing the Toyota Camry.
RELATED: Tesla Robotaxi Rides Without Safety Drivers Start in Austin
To help bolster EV demand, California Gov. Gavin Newsom, a Democrat, is seeking $200 million to resume offering tax rebates for EV purchases in the state.
