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California: Golden State Accounts for Almost 50 Percent of all U.S. Tesla Model 3 Sales in 2018

Last Updated March 4, 2021 2:30 PM
Shaurya Malwa
Last Updated March 4, 2021 2:30 PM

Almost half of all Tesla Model 3s sold in the first ten months of 2018 were registered in the carmaker’s home state of California; proving state subsidies, brand image, and tax incentives go a long way in attracting customers to electric cars.

Tesla Sales Going Strong

According to data from IHS Markit, a global information provider, Tesla sold over 39,606 Model 3 cars in California – accounting for a significant 49.3 percent of all related registrations in the States. Florida comes second with 4,064 registrations but accounts for a mere 5 percent of the total market. California is the most populous U.S. state with 40 million residents compared to Florida’s 18 million – meaning one in every 1009 citizens owns a Tesla Model 3 in the ‘Golden State.’

The research tracked both fleet sales and registrations to individual owners. Meanwhile, the launch of Model 3 did wonders for Tesla’s fortunes in 2018. Sales marked a massive 399 percent increase compared to the same period in 2017, even increasing the electric car market share in California to an all-time high of 4 percent.

California even dominated  its presence across global sales of all Tesla models. In the last quarter of 2018, over 22,758 cars were sold in the state, compared to 83,775 vehicles worldwide – representing a 27.18 percent market share across all models around the globe. Interestingly, all Tesla models are first rolled out in California before the rest of the States, and later, the world.

So what’s driving such spectacular growth figures – even rivaling Bitcoin – in the region for Tesla? Much of this can be attributed to California’s Zero Emission Vehicle Program  (ZEV) that has given Tesla a considerable incentive to manufacture and sell tens of thousands of cars each year in California and nine other states which follow the same mandate.

Tax breaks offered to electric car buyers are another lucrative advantage in Tesla’s favor. Rebates are currently capped at $2,500, with the government considering  an increase to $4,500. Couple this with a $7,500 federal tax credit, and Tesla buyers instantly look at a $10,000 discount on car purchases.

Lastly, the brand image associated with owning a Tesla vehicle could play its part in the carmaker’s sales surge. Buyers in the Californian region enjoy year-round favorable weather and are generally more educated about the benefits of electric vehicles. Compared to the Northeast regions and the Rocky Mountains where the population is likely to prefer SUVs, crossovers, and all-wheel-drive pickups, there’s much more economic sense to concentrating sales efforts in the Golden State.