Tesla Sales Declined 11.4% in California in 2025

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In the second half of 2024, as it became clear Tesla was going to see a year-over-year sales decline, CEO Elon Musk maintained a higher sales target for 2024 than the company ended up hitting, and also indicated Tesla should see a significant increase in sales in 2025.

Musk originally thought and said in 2024 that he expected Tesla to see sales growth that year. However, as the year marched on and sales were down, it eventually became clear consumer demand growth had stalled. With about 20–30% more production capacity than the company was using, Musk eventually accepted defeat in 2024 but projected 20–30% sales growth in 2025. In the end, however, Tesla’s sales declined significantly last year.

Sales declined around the world — from the USA to the UK to Germany to China. Now we also know that in one of the company’s biggest markets, California, its sales declined 11.4% year over year in 2025.

As you can see in the chart above and to the left, it wasn’t the norm to see sales declines in 2025, and Tesla’s decline was one of the worst (only “beaten” by Volvo and Dodge). The company dropped from 202,865 sales in 2024 to 179,656 sales in 2025.

Still, Tesla ended the year with a bigger portion of the California auto market than all but two other auto brands — Toyota and Honda. The company ended with 9.9% share of the California auto market, much more than its 3.7% share of the broader US auto market.

In the 4th quarter, though, Tesla’s sales were up slightly compared to the 4th quarter of 2024 (+2.1% from 43,402 sales to 44,302 sales). Perhaps a positive sign for coming quarters? Or perhaps a positive blip in a long-term sales decline? We will see.

Overall, the California New Car Dealers Association (CNCDA) reports that total vehicle registrations rose 3.3% from 2024 to 2025, whereas electric vehicle sales dropped slightly from 385,513 in 2024 to 378,216 in 2025, meaning a drop in EV share of new vehicle sales from 22.0% to 20.9%.

The US as a whole saw 8.2% of new vehicle sales being EV sales. And California’s share of the country’s total EV sales was 28.5% — nearly 3 out of every 10 new EV sales in the country were in California. Clearly, what happens in California is critical to what happens in the US as a whole in the EV market.

What of 2026? We shall see.