Tesla loses most market share in California EV market in 2025

Tesla experienced the largest decline in market share among electric vehicle makers in California during 2025. The company lost the most new-car buyers in the state last year, highlighting its struggles in one of the world's biggest EV markets.

In 2025, Tesla shed by far the most new-car buyers in California, according to recent analysis. This marked a significant loss of ground for the electric-vehicle manufacturer in a key market that ranks among the largest globally for EV adoption.

The downturn underscores challenges for Tesla in maintaining its dominance amid growing competition. California, with its strong push for electric vehicles, has been a bellwether for the industry's trends. Last year's figures show Tesla's share eroding more sharply than its rivals, pointing to shifting buyer preferences or other market dynamics.

While specific numbers on the exact percentage drop were not detailed, the report emphasizes the magnitude of Tesla's losses compared to other players. This development comes as the EV sector continues to expand, but with intensifying rivalry from established automakers and newcomers alike.

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Illustration of Tesla's 2025 sales decline, showing unsold cars, falling stock chart, Elon Musk, competitors, and market pressures.
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Tesla's 2025 Full-Year Sales: Second Consecutive Decline and Lost EV Leadership

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Building on November 2025 slumps across the US, Europe, UK, and China, Tesla's full-year 2025 sales fell for the second straight year, ceding its spot as the world's top EV seller. Key pressures included backlash against CEO Elon Musk's politics, U.S. tax incentive expirations, and surging competition, with shares dropping 5% after Nvidia's open-source autonomous driving reveal.

Tesla's US EV market share jumped 30% to 56% in November 2025 despite a 23% sales drop to 39,800 units—the weakest quarter since 2022—while overall EV sales fell 41% post-tax credit expiration. Legacy rivals like Ford and GM face billions in losses amid a fragmented market.

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Tesla maintained its lead in the used electric vehicle market throughout 2025, though competitors like Ford, Volkswagen, and Hyundai made significant gains. Models such as the Model 3 and Model Y accounted for nearly 40% of sales in one- to five-year-old used EVs. The market is set to become even more diverse in 2026 with increased off-lease inventory.

Tesla's Model Y and Model 3 led the US electric vehicle market in 2025 as part of a year that saw total sales of about 1.28 million units. The Model Y sold 357,528 units for 39.5% share, while the Model 3 delivered 192,440 units for 15.9% share—together over 55% of the market and underscoring Tesla's hold amid challenges. (See our series overview for full market breakdown.)

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Tesla's Cybertruck sales dropped sharply to 20,237 units in 2025, a 48.1% decline from 38,965 in 2024, according to Cox Automotive data. This marked the largest absolute sales drop among U.S. electric vehicles, amid broader EV market challenges including the end of a $7,500 tax credit. Despite the setback, Tesla remained the top EV seller in the U.S. with about 589,160 vehicles sold.

Building on BYD's milestone of surpassing Tesla with 2.26 million BEV sales in 2025 versus Tesla's 1.64 million deliveries, industry leaders highlight China's dominance while global EV growth accelerates toward 40-50% market share by 2030.

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BYD maintained its dominance in China's new energy vehicle market in 2025, capturing 27.2% share despite a 6.3% sales decline. Tesla ranked fifth with 4.9% share after a 4.8% drop in retail sales. Both companies faced challenges amid rising competition.

 

 

 

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