Electric vehicle sales in California are declining. Tesla hit hard

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Electric vehicle sales in California are declining. Tesla hit hard

When does a slowdown in sales growth move from a temporary incident to a longer-term trend? Maybe now.

After years of rapid expansion, electric vehicle sales growth in California trended downward in the middle of last year and has now turned negative: 101,443 fully electric cars were registered in the state in the second quarter of 2024, compared to 102,730 in the second quarter of 2023, a decrease of 1.2%.

As recently as last summer, this growth rate was positive at 55%. Growth fell to 16% in the fourth quarter of last year, to 2% in the first quarter of this year, and has now turned negative.

Growth in electric vehicle sales is an important factor in determining whether the state can meet its goal of banning sales of new carbon-emitting cars by 2035.

Electric vehicle unit sales increased 11% this quarter compared to last quarter, by 11,554 vehicles, but due to seasonal variations, comparing quarterly growth with the same quarter of the previous year is a standard way of measuring the health of a business.

Meanwhile, the market share of fully electric cars is roughly stable, according to the California New Car Dealers Assn. It accounted for 21.9% of all vehicles sold in the first half of this year. It was up more than 22% at one point last year. Under the state’s climate plan, market share must reach 35% by 2026, requiring an annual sales growth rate of around 20%.

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Tesla, once the darling of California car buyers, has been hit hard. It’s still the leader in electric vehicle sales by far, but Tesla’s sales in California plunged 24.1% in the second quarter. Nationally, according to Kelley Blue Book, Tesla sales fell 6.3% in the second quarter, even as total electric vehicle sales rose 7.3%.

There is no hard data to understand why Americans, and Californians in particular, are turning against Tesla. But the Tesla trend in the Golden State isn’t looking good.

Tesla “faces growing challenges. Its market share fell by 2.3 points compared to last year. …Tesla’s appeal appears to be fading, signaling potential problems for the direct-to-consumer automaker,” the car said. dealer group said in a press release.

Tesla sells directly to customers and doesn’t use car dealerships, so a bit of schadenfreude from the dealer group can be expected. But the figures the group publishes are reliably produced by collecting industry-standard data from Experian Automotive.

Besides Tesla, other electric vehicle losers in the second quarter included Volvo, down 66.5%, and Polestar, down 61.9%. Both brands sell electric vehicles made in China, hit hard by the Biden administration’s heavy tariffs. Volkswagen was down 34.5%. Chevrolet was down 50.6% – but that’s mainly because it discontinued the popular Chevrolet Bolt EV, with a promise to reintroduce a new version. If the Bolt had still been on sale, there’s a good chance that electric vehicle sales statewide would have been in positive territory.

Gainers include Audi, up 77.4%; BMW, up 59.5%; Kia, up 72.3%; and Toyota, up 108% – although these increases come from a fairly small sales base.

Overall, California auto sales increased 4.8% in the second quarter. Gasoline-battery hybrids are a bright spot: up 21%. Sales of plug-in hybrids, capable of traveling a few dozen kilometers on batteries alone, have decreased slightly.

If the trend of stagnant electric vehicle sales continues, it could spell trouble for Gov. Gavin Newsom. EV mandate: By 2035, automakers will be allowed to sell only electric cars in California, 80% all electric and 20% plug-in hybrids.

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