Tesla's California Sales Drop 21% in Q2 Amid Political Backlash

- Tesla’s Q2 California car registrations dropped by 21%, marking seven consecutive quarterly declines. - The company faces increasing pressure from expiring incentives, a stagnant model lineup, and consumer sentiment impacted by CEO Elon Musk’s political involvement. On July 23, 2025, Cryptopolitan reported that Tesla's Q2 car registrations in California fell 21% year-over-year. Data from the California New Car Dealers Association (CNCDA) showed a drop to 41,138 registrations, down from 52,119 during the same period in 2024. This marks the company's seventh consecutive quarterly sales decline in the state, highlighting its mounting market challenges. California’s electric vehicle (EV) sector has also faced a broader slowdown. In Q2 2025, battery-powered models accounted for 18.2% of new vehicle registrations, down from 22% the previous year. While Tesla’s Model Y and Model 3 remain the top-selling EVs in the state, the company’s overall market share continues to shrink. This decline comes even as the broader California car market expanded in the first half of 2025. Several factors contribute to Tesla’s struggles. CEO Elon Musk's increasingly visible political activities have contributed to negative brand perceptions among some California consumers, particularly in the predominantly liberal state. This sentiment has fueled protests like the "Tesla Takedown" movement, which originated in California. Tesla’s stagnant product lineup is another limiting factor. The company has not introduced a new mainstream model since the 2023 launch of the Cybertruck. Cox Automotive reports that the Cybertruck has sold only about 11,000 units year-to-date. An updated Model Y debuted earlier in 2025, but it has not significantly boosted demand. Additionally, Tesla faces two approaching deadlines that could affect its revenue. The $7,500 federal EV tax credit will expire on September 30, 2025. A separate regulatory credit program, which has contributed over $10 billion to the company’s income in the last decade, is also ending. These regulatory credits were key to Tesla’s profitability in Q1 2025. In response to the downturn, Tesla has implemented strategies like offering free supercharging for Model 3 buyers and complimentary transfers of its Full Self-Driving feature. However, analysts have raised concerns about Tesla’s ability to maintain profitability once regulatory credits phase out. Meanwhile, activists from the "Tesla Takedown" movement plan to stage a public demonstration at Tesla's recently opened retro-themed diner in West Hollywood on July 26, 2025. Organizers expect a large turnout to protest Musk’s political involvement.