- Tesla’s market share in California plunged in California despite big price cuts, a report says.
- Data reviewed by Reuters found Tesla’s market share in the state fell from 72.7% to 59.6% in a year.
- Tesla’s profits have also plunged since the cuts after Elon Musk promised to focus on market share.
Potential Tesla buyers in California have been turning their backs on the brand despite a series of price cuts this years, according to a report.
Data from the California Energy Commission reviewed by Reuters showed that Tesla’s market share in the state was 59.6% between January and March, down from 72.7% for the same period last year.
Meanwhile, competitors including Volkswagen, General Motors, Chevrolet and Kia all increased their market share increase in the first three months of the year, per the news agency.
Tesla CEO Elon Musk brought in massive price cuts at the beginning of the year and followed them up with several more in a bid to win more customers and continue to dominate the EV market. Tesla has been accused by Ford’s CEO of potentially initiating an EV price war as a result.
The price cuts helped send Tesla’s profits down 24% in the first quarter as the company made less on each car sold.
“Our near-term pricing strategy considers a long-term view on per-vehicle profitability given the potential lifetime value of a Tesla vehicle through autonomy, supercharging, connectivity and service,” Tesla said in a presentation alongside its latest results.
“We expect that our product pricing will continue to evolve, upwards or downwards, depending on a number of factors.”
While Musk said he planned to prioritize market share over profits, the scale of the decline still spooked investors. Shares in Tesla have dropped more than 10% in the past five days, cutting Musk’s personal net worth by around $13 billion.
California dominates the US EV market, according to data from the US Department of Energy. Its 563,000 vehicles registered in 2021 was nearly six times higher than its closest competitor Florida.
As a broadly liberal state, Musk has also brought controversy in California for his courting of Republicans and high-profile takeover of Twitter, possibly deterring prospective buyers.