Introduction:
The electric vehicle (EV) market in California is facing a challenging time despite an increase in EV sales in the first quarter of 2024. According to a report from the California New Car Dealers Association (CNCDA), while the number of EVs sold has grown, the market share of EVs has actually decreased. This is due to the overall growth in new-car registrations, with a higher number of non-electric vehicles being sold. The report also highlights a decline in Tesla’s EV sales lead in California, with Legacy automakers such as Mercedes-Benz and BMW seeing significant gains in Q1. Despite these challenges, franchised dealerships have seen an increase in EV sales compared to direct sales models like Tesla’s. California remains a key market for EV sales in the country, with one in four new vehicles sold in the state having a charge port.
California’s EV market saw an increase in sales in the first quarter of 2024, with the absolute number of EVs sold growing from 89,741 in the fourth quarter of 2023 to 90,296 in Q1 2024. However, despite the increase in volume, the market share of EVs decreased from 21.5% to 20.9%. This is due to the overall growth in new-car registrations, with a higher number of non-electric vehicles being sold in the state.
The report from CNCDA also highlights a decline in Tesla’s EV sales lead in California. Tesla registrations were down 7.8% from the previous quarter, continuing a trend of declining sales for the once-California-based automaker. This decline in Tesla sales may have contributed to the recent flattening of EV sales in California, with Legacy automakers like Mercedes-Benz and BMW seeing significant gains in Q1.
Legacy automakers are making strides in the EV market in California, with Mercedes-Benz and BMW seeing the highest increases in EV sales in Q1. Mercedes-Benz posted a 3% gain, while BMW saw a 2.4% increase in EV sales. This shift in market dynamics suggests that the competition in the EV market is heating up, with Legacy automakers gaining ground on Tesla.
EV sales through franchised dealerships in California saw a 14% increase in Q1, while direct sales models like Tesla’s saw a 3% drop. Franchised dealerships now account for 66% of “alternative powertrain types” in California, according to the CNCDA report. This trend highlights the changing landscape of EV sales in the state, with traditional dealership models gaining traction over direct sales models.
Despite the challenges facing the EV market in California, the state remains a key player in the national EV market, accounting for nearly a third of EV sales in the country. Even with the recent market-share hiccup, one in four new vehicles sold in California has a charge port, indicating a strong demand for EVs in the state. California’s continued leadership in the EV market will be crucial in driving the transition to a cleaner and more sustainable transportation system, both within the state and across the country.