Tesla vehicle registrations in California fell by nearly a quarter in the first three months of 2026, with Elon Musk’s EV giant recording more than 10,000 fewer sales compared to the same period in 2025. The entire EV market in California has crashed, with Q1 registrations down 40 percent to levels not seen since 2021.
Electrek reports that data from the California New Car Dealers Association’s Q1 2026 Auto Outlook report shows Tesla registered 31,958 vehicles in California during the first quarter, representing a decline of 10,253 units from the 42,211 vehicles registered in Q1 2025. This translates to a 24.3 percent decrease year-over-year. The decline is particularly notable given that the comparison period in 2025 was already considered weak due to production constraints related to the Model Y changeover, which had resulted in a 15 percent sales decline at that time.
Tesla’s overall market share in California dropped from 9.2 percent to 7.7 percent during this period. Despite the decline, the Model Y maintained its position as the leading light SUV in the state, recording 22,907 registrations and capturing a 53.3 percent share of the luxury compact SUV segment, though these figures represent a significant decrease from the previous year. The Model 3 added 5,688 units to Tesla’s quarterly total.
The broader electric vehicle market in California experienced an even more dramatic downturn. Total EV registrations plummeted 40.2 percent year-over-year, falling from 95,520 units in Q1 2025 to just 57,111 units in Q1 2026. The EV market share in California dropped from approximately 21 percent in 2025 to 13.7 percent, marking the lowest level since the fourth quarter of 2021 and effectively erasing several years of market gains.
The decline affected nearly all electric vehicle manufacturers operating in the state. Mercedes-Benz EV registrations collapsed by 81.9 percent, while Chevrolet registrations fell 59.6 percent. BMW experienced a 58.9 percent decline, and Ford saw a 58.8 percent decrease. Kia registrations dropped 48.2 percent, and Rivian fell 35.9 percent. Even Hyundai, which has been expanding its presence in the electric vehicle sector, recorded a 30.4 percent decline in EV registrations.
In contrast to the struggling electric vehicle market, hybrid vehicles surged to capture 20.9 percent of the market, surpassing electric vehicles for the first time in recent years. Traditional gasoline-powered vehicles reclaimed significant ground, rising to 61.1 percent of registrations from 54 percent in 2025.
Industry observers point to the expiration of the $7,500 federal electric vehicle tax credit on September 30, 2025, as the primary driver behind the market contraction. The elimination of this incentive contributed to a 28 percent drop in new electric vehicle sales nationally during the first quarter of 2026. California, which accounts for 29.6 percent of all U.S. zero-emission vehicle registrations, has been particularly affected by the policy change.
Breitbart News reported in 2025 that Elon Musk campaigned to “kill” President Trump’s “Big Beautiful Bill” after he learned it would slash the EV tax credits that served as a major incentive to buy Musk’s electric cars:
“Call your Senator, Call your Congressman, Bankrupting America is NOT ok! KILL the BILL,” the billionaire tech mogul wrote Wednesday.
Musk’s anger at the reconciliation bill, which narrowly passed the House of Representatives on May 22, has largely been attributed to its omission of funding cuts made by DOGE — but Republicans have also suggested that the Tesla CEO is in opposition due to the bill slashing billions of dollars in electric vehicle (EV) tax credits.
Read more at Electrek here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.