The electric vehicle market in the United States saw a record 1.3 million units sold in 2024. However, market leader Tesla experienced pressure, with its first annual delivery decline. A new report reveals that California, the largest market for electric vehicles in the U.S., has seen a decline in Tesla model registrations.
Key Findings
- Tesla’s sales in California dropped by 12% in 2024 and 8% in the fourth quarter.
- Registrations for the Model 3 plummeted 36% year-over-year in 2024.
- Tesla’s market share of zero-emission vehicles in California decreased from 60.1% in 2023 to 52.5% in 2024.
- All Tesla models, except the newly launched Cybertruck, experienced year-over-year declines in 2024.
The Potential Impact of Elon Musk’s Politics
Elon Musk’s endorsement of Donald Trump may be a contributing factor to the decline in Tesla sales. Musk spent at least $288 million in an attempt to get Trump re-elected. The strong Democratic base in California, where Democratic nominee Kamala Harris won by 20.2 points in the 2024 election, may be less likely to support Tesla due to Musk’s ties to the Trump White House.
Market Performance
Tesla’s sales decline in California is more significant than in the rest of the country. The company sold 633,762 vehicles in the United States in 2024, a 5.6% decrease from the previous year. The Model Y and Model 3, which ranked as the top two bestselling electric vehicles in the U.S., experienced sales drops of 6.6% and 17.4%, respectively.
Brand Value and Consumer Perception
A report by Brand Finance found that Tesla’s brand value decreased by $15 billion in 2024, dropping from 18th to 36th place in brand value rankings. The survey also revealed that Tesla owners and other electric vehicle owners are less likely to recommend or consider purchasing a Tesla, potentially due to Musk’s personal politics and outspoken beliefs.
Stock Performance
Tesla’s stock price has been affected, down 5.5% to $382.27, with a 52-week trading range of $138.80 to $488.54. Despite this, the stock is up 111% over the last year.
Conclusion
The decline in Tesla sales and brand value may be linked to Elon Musk’s endorsement of Donald Trump and his outspoken political beliefs. As the electric vehicle market continues to grow, Tesla’s ability to recover from this decline will depend on its ability to appeal to a wider range of consumers and restore its brand reputation.