Elon Musk's political involvement causing trouble? Tesla's sales in California continue to decline, and vehicle registrations in France also plummet by 63%

Media reports indicate that Tesla's vehicle registrations in California have declined across all four quarters of 2024, with sales of its second most important model, the Model 3, plummeting 36% for the year. Meanwhile, Tesla's vehicle registrations in France also fell by 63%. As a result, Tesla's stock price dropped 5% on Monday. Supporting the Republican Party, Musk's Relationship with California Deteriorates According to Bloomberg News, data from the California New Car Dealers Association shows that as the largest electric vehicle market in the U.S., Tesla's sales in California fell nearly 8% in the fourth quarter of last year, with an annual decline of 12%. The annual registrations for the Model 3 sedan dropped by more than one-third. Despite Tesla adding its fifth model, the Cybertruck, last year, sales continued to decline. Analysts believe that, in addition to operational factors (such as the redesign of the Model 3 sedan at the beginning of the year), Tesla's market performance in California may be affected by the company's CEO Elon Musk's active involvement in the U.S. elections. The 53-year-old Musk has spent at least $288 million supporting Trump and other Republican candidates in the 2024 U.S. presidential election. In the 2024 election, the number of voters in California supporting Democratic presidential candidate Harris still exceeds Trump supporters by 20.2%. Nevertheless, Tesla still holds the largest share of the zero-emission vehicle market in California, although its market share has decreased from 60.1% in 2023 to 52.5%. Several of Tesla's models in the U.S. market saw a decline in sales in 2024, with the only exception being the Cybertruck, which began sales at the end of 2023. In the electric vehicle market, Honda and Hyundai emerged as 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, having previously ignored California's lockdown policies during the COVID-19 pandemic. However, one of Tesla's two electric vehicle assembly plants in the U.S. 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 relocate from California to Texas, citing a new law signed by California Governor Gavin Newsom. This law prohibits schools from requiring teachers to inform parents about changes in students' gender identity, a policy that Musk found objectionable. After Trump won the election, Newsom also threatened to exclude Tesla from the list of brands that could receive electric vehicle subsidies. Analysts believe that if Trump fulfills his campaign promise to eliminate the federal consumer electric vehicle tax credit, it will further impact Tesla's sales. Involvement in European Politics, Tesla's Registrations in France Plummet Media reports also indicate that not only in California, but Tesla's registrations in France fell by 63% in January, reaching the lowest level since August 2022. According to data from the French Automotive Industry Association (La Plateforme Automobile), Tesla registered only 1,141 new vehicles in January, far below the overall market performance. In contrast, the overall sales in the French automotive market fell by 6.2%, with electric vehicle sales slightly decreasing by 0.5%. In recent months, Musk has played an unprecedented role in European politics, openly supporting the far-right German political party "Alternative for Germany" (AfD) and repeatedly criticizing British Prime Minister Keir Starmer and his Labour government. It remains unclear whether this political stance has affected Tesla's demand in Europe, but its market performance continues to be sluggish. At the same time, Tesla's registration volume in EU countries fell by 13% last year, with the German market (the largest automotive market in the EU) contributing most of the decline. Tesla's sales in Germany have been impacted by slow product updates, intensified market competition, and the cancellation of government subsidies. In 2023, Tesla's sales in Germany plummeted by 41%, while overall electric vehicle sales in Germany decreased by 27% during the same period. The Federal Motor Transport Authority is expected to release January's market data on Wednesday. Under the increasingly stringent carbon emission regulations in the EU, Tesla is seen as a key player for its competitors' compliance. In 2024, Tesla will collaborate with at least five automotive manufacturers to jointly calculate their electric vehicle emission data, including Toyota, Stellantis NV, and Ford Motor Co. Meanwhile, French government officials called on the European Commission at the end of last month to immediately suspend passenger car carbon dioxide emission regulations, warning that this regulation could lead to the EU paying Tesla billions of euros in subsidies, while Tesla CEO Musk is openly attacking European regulations and values. Tesla's stock price fell 5.17% on Monday, closing at $383.68.