Tesla's price cuts in California were not able to save the EV maker's market share from falling.
In an aerial view, Tesla cars sit parked in a lot at the Tesla factory on April 20, 2022, in Fremont, California. Tesla reported first-quarter earnings that far exceeded analyst expectations, with revenue of $18.76 billion compared to expectations of $17.80 billion.
The giant automaker has been making headlines as it conducted multiple price cuts in the United States. Many critics said that Tesla had started a price war. However, the EV maker clarified that the price cuts were just to make the electric car more affordable.
Since Tesla EVs are now more affordable in California, it was expected that the market share of the carmaker would increase.
However, the opposite happened for Tesla. Here's what the EV maker's Q1 2023 report revealed.
Tesla's California Market Share Plunges!
According to Business Insider's latest report, Tesla's market share in California plunged by more than 10%.
Tesla CEO Elon Musk speaks during an event to launch the new Tesla Model X Crossover SUV on September 29, 2015, in Fremont, California. After several production delays, Elon Musk officially launched the much anticipated Tesla Model X Crossover SUV.
Also Read: Elon Musk: Tesla Full Autonomy Promised for 2023, Again-Is He Referring to Level 4/5 Autonomy?
Between January and March 2023, Tesla's market share in California was just 59.6%; the EV maker's market share in California was 72.7% between January and March 2022.
On the other hand, General Motors, Chevrolet, Kia, Volkswagen, and other competitors of Tesla experienced the opposite as their market shares grew in California in Q1 2023.
Despite the market share decrease, Tesla is still quite optimistic that its market share in California will improve before 2023 ends.
"Although we implemented price reductions on many vehicle models across regions in the first quarter, our operating margins reduced at a manageable rate," said the EV maker via its official Q1 2023 report.
The automaker added that its near-term pricing strategy is designed for a long-term view of per-vehicle profitability.
"We expect that our product pricing will continue to evolve, upwards or downwards, depending on a number of factors," added Tesla.
California's Importance in EV Industry
California is considered to be the top U.S. state when it comes to EV sales.
Alternative Fuels Data Center's report revealed that California had over 500,000 EV registration back in 2021. This means that Tesla greatly relies on California when it comes to selling electric cars.
You can click this link to see more details about California's EV market.
In other news, a first glimpse of the Tesla Model 3 Project Highland was leaked online. We also reported about Tesla Cybertruck's expected 2023 production, which Elon Musk promised.
For more news updates about Tesla, always keep your tabs open here at TechTimes.
Related Article: Tesla Cuts Prices for Model 3, Model Y Ahead of Q1 Earnings Report
