Elon Musk-led Tesla Inc. TSLA is experiencing a significant decline in its California sales, reaching the lowest point in four years. This downturn is raising questions about the impact of CEO Musk's political actions on the company's appeal.
What Happened: Tesla’s sales in California have dropped to 26.1% of its total U.S. sales in the fourth quarter of 2024, marking a significant decrease. Tesla researcher Troy Teslike suggests that this decline may be linked to Musk’s political actions.
"I've been considering ways to measure the impact of Elon's political actions on Tesla sales. One approach is to track whether California’s share of Tesla sales has been decreasing over time," Teslike said in a post on X.
"If there is a negative impact, it would likely be most noticeable in California, given it's a left-leaning state," he added.
It is to be noted that the decline in the fourth quarter of 2024 is similar to what was witnessed in 2023, with the last quarter performing the worst during the year. While California sales accounted for 27.9% of the company's U.S. sales in the fourth quarter of 2023, the number was down to 26.1% in 2024.
Data from the California New Car Dealers Association (CNCDA) indicates a potential shift in consumer sentiment within the state. Known for its progressive stance, California could serve as a barometer for how Musk’s political views impact Tesla’s market share.
The report suggests that if Musk’s political actions are indeed influencing sales, California would likely show the most significant impact.
Teslike has been analyzing U.S. sales figures to assess the ongoing effects of Musk’s political involvement. The focus remains on whether this downward trend in California will persist, potentially signaling broader implications for Tesla’s market position in politically similar regions.
Why It Matters: The decline in Tesla’s California sales is part of a broader trend affecting the company’s global performance. According to a report from December, Tesla’s sales in the U.S. and Europe are projected to decline, despite an anticipated rise in China. This could weigh down the company’s overall global deliveries.
Earlier this year, it was reported that Tesla’s sales in California dropped by 12% in 2024, raising questions about whether Musk’s political support for Donald Trump is affecting the brand’s image. The U.S. sold a record 1.3 million electric vehicles in 2024, but Tesla faced pressure and its first annual delivery decline.
Additionally, Mark Cuban has criticized Musk’s political moves, suggesting that his focus on political influence could come at the expense of Tesla’s core audience. Furthermore, Tesla’s struggles in Europe, with a 13% drop in new car registrations in 2024, contributed to the company’s first global delivery decline in years, as reported by the European Automobile Manufacturers Association.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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