Tesla shares fell 5% on Monday. Media reports indicate that Tesla’s car registrations in California have declined in all four quarters of 2024, with sales of the company’s second most important model, Model 3, plunging 36% for the year. Analysts believe that Tesla's poor market performance in California may be caused by the company's CEO Musk's active involvement in the US election. At the same time, Tesla's vehicle registrations in France also plummeted 63%.

Media reports indicate that Tesla’s car registrations in California have declined in all four quarters of 2024, with sales of the company’s second most important model, Model 3, plunging 36% for the year. At the same time, Tesla's vehicle registrations in France also plummeted 63%. Affected by this, Tesla's stock price fell 5% on Monday.

Musk supports Republican Party and increasingly at odds with California

According to Bloomberg News, data provided by the California New Car Dealers Association (California New Car Dealers Association) show that Tesla’s sales in California, the largest electric vehicle market in the United States, fell by nearly 8% in the fourth quarter of last year and 12% for the whole year. Among them, the annual registration volume of Model 3 sedans plummeted by more than one-third.

Sales have fallen despite Tesla adding a fifth model, the Cybertruck, last year.Analysts believe that in addition to business operation factors (such as the facelift of the Model 3 sedan at the beginning of the year), Tesla's market performance in California may be caused by the company's CEO Elon Musk's active involvement in the US election.

Musk, 53, has spent at least $288 million supporting Trump and other Republican candidates in the 2024 U.S. presidential election. In the 2024 general election in California, the number of voters supporting Democratic presidential candidate Harris is still 20.2% more than Trump supporters.

Despite this, Tesla still retains the largest share of California's zero-emission vehicle market, although its market share fell to 52.5% from 60.1% in 2023. Sales of many Tesla models in the U.S. market will decline in 2024, with the only exception being the Cybertruck, which will go on sale at the end of 2023.

In the electric vehicle market, Honda and Hyundai became the biggest winners, with market shares increasing by 1.8% and 1.5% respectively.

Musk moved Tesla's headquarters from California to Texas in 2021 after ignoring California's lockdown policies during the COVID-19 epidemic. However, one of Tesla's two electric vehicle assembly plants in the United States is still located in Fremont in the San Francisco Bay Area.

In July 2023, Musk announced that his social media company X and aerospace company SpaceX would also move from California to Texas, citing a new law signed by California Governor Gavin Newsom. The law prohibits schools from requiring teachers to notify parents of changes in a student's gender identity, a policy that sparked Musk's dissatisfaction.

After Trump won the election, Newsom also threatened to exclude Tesla from the list of brands that may provide electric vehicle subsidies.Analysts believe that if Trump fulfills his campaign promise and cancels the federal consumer electric vehicle tax credit, this will have a further impact on Tesla's sales.

Intervening in European politics Tesla registrations plummet in France

The media also reported that not only California, Tesla's registrations in France plummeted 63% in January, hitting the lowest level since August 2022.

According to data from the French automobile industry association (La Plateforme Automobile), Tesla registered only 1,141 new cars in January, which is far lower than the overall market performance. In contrast, the overall sales volume of the French automobile market fell by 6.2%, and the sales of electric vehicles fell slightly by 0.5%.

Musk has played an unprecedented role in European politics in recent months, openly supporting Germany's far-right Alternative for Germany (AfD) party and repeatedly criticizing British Prime Minister Keir Starmer and his Labor government.

It's unclear whether this political stance has had an impact on Tesla demand in Europe, but its market performance continues to be sluggish.

At the same time, Tesla's registrations in EU countries fell by 13% last year, with the German market (the EU's largest car market) contributing most of the decline. Tesla's sales in Germany have been affected by slow product updates, intensifying market competition and the elimination of government subsidies.

Tesla's sales in Germany plummeted by 41% in 2023, while overall sales of electric vehicles in Germany fell by 27% during the same period. Germany's Federal Motor Transport Authority (Federal Motor Transport Authority) is expected to release market data for January on Wednesday.

Tesla is seen as key to compliance among rivals under the EU's increasingly stringent carbon emissions regulations. In 2024, Tesla will jointly calculate its electric vehicle emissions data with at least five automakers, including Toyota, Stellantis NV and Ford Motor Co.

At the same time, French government officials called on the European Commission to immediately suspend passenger car carbon dioxide emissions regulations at the end of last month, warning that this regulation could lead to the EU paying billions of euros in subsidies to Tesla, while Tesla CEO Musk is openly attacking European regulations and values.

Tesla shares closed down 5.17% on Monday at $383.68.

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