Tesla (TSLA, Financial) stock fell over 3% on Wednesday following new data showing another drop in vehicle registrations in California, one of its most important markets. According to Experian Automotive, Tesla's car registrations in the state fell 15.1% year-over-year in Q1 — marking the sixth consecutive quarterly decline.
This trend stands in contrast to the broader auto market in California, which saw total new vehicle registrations rise 8.3% during the same period. The California New Car Dealers Association (CNCDA) pointed to Tesla's direct-to-consumer sales model and CEO Elon Musk's public image as possible factors contributing to the brand's decline in appeal.
Tesla's share of the state's Zero Emission Vehicle market slipped to 43.9%, down 11.6% from the prior year. ZEVs now make up 20.8% of total car sales in the state, down from 22% a year ago — signaling broader headwinds for the segment.
For the full year, overall new car registrations in California are projected to dip 2.3% to 1.71 million units. Toyota (TM, Financial) led the market with a 16.5% share, followed by Honda (HMC, Financial) at 10.8%, with Tesla holding 9.1%. The data suggests shifting consumer preferences are complicating California's ambitious EV targets.
