According to a report by the California New Car Dealers Association (California New Car Dealers Association), Tesla's car sales in California declined for the second consecutive quarter, indicating that the company's popularity in the state may have peaked.
The industry group said on Monday that although Tesla is still selling well in California, Tesla's overall new car registrations fell 7.8% year over year in the first quarter. Tesla's registrations fell 9.8% in the fourth quarter of last year.
According to the report, Tesla's share of the California electric vehicle market fell 6.4 percentage points to 55.4%. Meanwhile, new electric vehicles launched by luxury car makers Mercedes-Benz and BMW helped these companies advance in the California market, although the share of electric vehicles in the overall market declined slightly during the same period.
The California New Car Dealers Association said in a statement that California's “love for electric car giant Tesla may have peaked.” The organization said the company's dominance is weakening and “traditional manufacturers are stepping up their actions.”
Tesla, led by Elon Musk, has been under pressure from increased competition and weak demand across the industry this year. The company said last week that it would speed up the launch of new, more affordable models, while also prioritizing Musk's pursuit of fully automated driving technology.
Tesla's newest model, the Cybertruck, is developing slowly. A trade group spokesperson quoted Experian Automotive data as saying that Cybertruck's sales volume was insufficient to be included in the report, but 574 vehicles were registered in California in the first quarter.
The slowdown in California is worth watching for Tesla. Although Tesla is now headquartered in Austin, the company was founded in California. Early tech-savvy users in Silicon Valley and consumers in Los Angeles were critical to the company's early success.