Tesla Dropped from #2 Auto Brand to #3 Auto Brand in California in 1st Quarter

Continuing our series on California EV sales in the first quarter, we’re now on to overall auto brand rankings. Why spend so much time on California? Well, if it was a country (and the rest of the US was still a country), it would be the 10th largest auto market in the world. Furthermore, it would rank even higher if we were focused on top EV markets. (Though, I don’t have that data on hand — perhaps a story for another day.)

Also, being the birthplace of Tesla and being a bastion of progressivism, it’s a fascinating market for examining Tesla sales trends. In fact, if we split the US up into states and combined European countries into one market (I know, now we’re getting weird), California would only trail China (~135,000) and Europe (~53,000) in Tesla sales.

Anyway, let’s get on to the trends. As you can see in the chart below, Tesla sales declined by about 7,000 units in the 1st quarter compared to the 1st quarter of 2024. With Honda climbing by about 5,000 sales (and Toyota climbing by about 5,000 sales), that actually meant that Tesla dropped from the second best selling auto brand in the Golden State to the third best selling auto brand in the Golden State.

When you consider that Tesla is the only pure EV brand on this ranking, that’s a hit to the EV market and EV growth. On the plus side, though, we can note that Honda didn’t really have any EV sales in the 1st quarter of 2024 and then had ~4,500 in the 1st quarter of 2025, accounting for almost all of Honda’s sales rise. Similarly, Toyota’s EV sales rose by almost 4,000 units. And that’s just two brands. So, we can see that Tesla’s sales decline could be coming in part from a growing number of EV options — and more competitive EV options — on the California market.

To wrap up, though, the California New Car Dealers Association (CNCDA) included its own charts on brand sales trends year over year, and they are not pretty:

Only doing better than Dodge in the first chart, Tesla sales declined 15% year over year last quarter. Perhaps stinging even more, the company’s share of the California auto market dropped from 9.1% to 3.6%! Yikes! That really stings. Can Tesla bounce back in the 2nd quarter with the rollout of the new Model Y? We’ll see. But what is certain is that this market is very important to Tesla, so the company needs to see a big rebound on the back of the refreshed “Juniper” Model Y.

By the way, looking at 2024 sales as a whole, Tesla was also #2 in the market. So, the drop from 3rd to 2nd isn’t just from the 1st quarter of 2024 to the 1st quarter of 2025, but also from the year as a whole to the first quarter. And that was already a year-over-year sales decline. The next quarter or two mean a lot for the future of Tesla. Stay tuned, and share any predictions you have!