Tesla Model Y remains a top seller in California’s new vehicle market, although its market share has seen a slight decline due to increased competition from other manufacturers. The California electric vehicle (EV) market in 2024 presents a mix of challenges and opportunities, according to a report sponsored by the California New Car Dealers Association.
While Tesla’s market share dipped in the second quarter of this year, it remains a key player in the battery electric vehicle (BEV) segment. The report highlights that Tesla has been dominant in the BEV market but plug-in hybrid EVs (PHEVs) from other manufacturers have started to gain a larger market share. This indicates a healthy and growing market with increased consumer choice.
Tesla’s new vehicle registrations in California totaled 102,106 in the first half of 2024, a decline of 17 percent compared to the same period last year. Despite this decline, Tesla continues to hold a significant portion of the BEV market. The Tesla Model Y remains the best-selling BEV with 69,810 registrations year-to-date through June, followed by the Tesla Model 3 with 21,050 registrations.
However, Tesla’s market share has dipped by 2.3 points from last year, and second-quarter registrations have plummeted by 24.1 percent compared to the same period in 2023. This raises questions about whether Tesla has reached its peak in California. The report highlights the emergence of strong competitors like Rivian, Hyundai, and Ford who are making notable gains in the BEV market.
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. Hyundai’s Ioniq 5 and Ford’s Mustang Mach-E are also gaining traction among consumers, offering alternatives to Tesla’s lineup. The Hyundai Ioniq 5 secured third place in the top-selling EVs in California with 7,191 registrations.
California remains the largest and most influential market for electric vehicles in the United States, with 33.0 percent of all BEV registrations. However, internal combustion engines (ICEs) still hold the largest market share. Combined sales of BEVs, PHEVs, hybrids, and fuel cell vehicles account for 38 percent of the market share in California, while ICE vehicles hold 62 percent.
Several economic factors are influencing 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.
The average age of vehicles in operation has reached an all-time high, encouraging vehicle owners to consider upgrading to newer models with advanced safety features and alternative powertrains. Franchised new car and truck dealers in California account for over 67 percent of combined sales for all alternative powertrain types this year, demonstrating consumer confidence in local dealerships and established brands.
In conclusion, while Tesla’s market share has seen a decline in California’s EV market, it remains a key player. The emergence of strong competitors like Rivian, Hyundai, and Ford indicates a growing market with increased consumer choice. Economic factors such as higher interest rates and rising household incomes are impacting market dynamics, but falling vehicle prices and the demand for advanced safety features are driving sales. Overall, California continues to be a significant market for electric vehicles.
