Silicon Valley rebuffs Tesla amid sales slide on aging models, new rivals and Elon Musk's social media activism

Car buyers in Silicon Valley, where Tesla was born, are turning away from the brand as its models grow stale, EV competition heats up and the liberal majority there rebuffs CEO Elon Musk's rightward political shift, according to industry analysts and the most recent vehicle registration data.

Musk famously moved Tesla's headquarters to Austin, Texas, from Silicon Valley in 2021 after clashing with local officials over COVID-19 restrictions at its Fremont factory. Now, some electric vehicle buyers in the high-tech region are returning the snub.

EV enthusiasts are shifting toward Rivian, Hyundai and other brands that have fresher products and aren't associated with Musk's conservative political and social commentary, amplified daily on his social media platform X.

"I pull up to an intersection and every car is a Tesla Model Y, and I'm also driving one because it's the modern Toyota Camry," said Loren McDonald, head of Silicon Valley consultancy EVAdoption. "But there are a lot of reluctant Tesla owners who don't want to give Elon any more money. More and more people have just had it with him."

In Santa Clara County, the heart of Silicon Valley, new Tesla registrations fell 22 percent from January through July from the same period a year earlier, while EV rivals saw 41 percent growth, according to S&P Global Mobility. The data includes new battery-electric vehicles but not hybrids.

In the broader five-county tech corridor, Tesla registrations fell 21 percent in the same period while non-Tesla EVs grew 1.4 percent, according to S&P Global Mobility. The other counties are Alameda, San Mateo, Contra Costa and San Francisco. The Silicon Valley Historical Association considers all to be within the region.

Tesla dissolved its media relations team in 2020 and didn't respond to an email request seeking comment.

"In the most dense EV counties in California, the market is shifting away from Tesla to other brands," said Tom Libby, an analyst at S&P Global Mobility. "There's much, much greater competition and it's coming from many brands in many segments with new models. Tesla is facing much greater competition at all levels."

Tesla's volume models — the Model 3 sedan and Model Y crossover — are badly in need of redesigns, Libby said. The Model 3 launched in 2017 and Model Y in 2020. Although they have undergone internal changes, they look the same in a market hungry for fresh metal. Tesla's newest vehicle, the $100,000 Cybertruck, is recent but has limited appeal because of its wild styling.

Tesla still has the highest brand loyalty in the U.S. at around 70 percent, Libby said, which is an advantage, but car buyers looking at an EV for the first time are finding better options at similar price points.

In addition to Tesla's product problem, it faces a serious image problem as Musk antagonizes large swaths of Northern California's politically liberal population.

"The general rule for anybody who reads a business section is you don't want to do anything to upset a huge percentage of your customer base, and Musk is ripping up the rule book and throwing it in the garbage," said Brian Maas, president of the California New Car Dealers Association.

Musk endorsed Republican Donald Trump for president in July. In September, Musk directed an X post at pop superstar Taylor Swift, saying cryptically, "I will give you a child and guard your cats," after she endorsed Democratic candidate Kamala Harris. On X, #ElonIsCreepy became a trending topic despite Musk suggesting the comment was a joke.

Musk sometimes posts on X dozens of times a day, promoting what his critics call conspiracy theories. Musk says he's expressing his political beliefs, defending free speech and engaging in humor on the platform he bought in 2022.

"I can't think of anyone that is not only this controversial but is purposely controversial," Maas said of Musk.

"Five years ago, Tesla pretty much had the EV market to itself with a couple of minor exceptions," Maas said. "Now, that bloom is off the rose. It's an EV that has to compete with all these other EVs, and all these other EVs are newer. And on top of all that, you have Mr. Musk's controversies and people are exhausted."

In California as a whole, Tesla registrations fell 12 percent from January through July, according to S&P Global Mobility. In the U.S., Tesla registrations declined 8.5 percent in the first seven month of the year, the data shows.

Tesla was still the top EV brand in California with 56 percent of the market, although that was a big drop from its 64 percent share in the year-earlier period, according to S&P Global Mobility.

Brands gaining on Tesla for EV registrations include Hyundai with 55 percent growth from January through July compared with a year earlier. Rivian had a 50 percent rise and Ford a 24 percent gain, S&P Global Mobility said. California's total EV registrations reached 232,353 in the seven-month period.

Recent consumer data suggests Musk's antics could be a drag on the brand for some time in Silicon Valley, California and beyond.

Nationwide, Tesla's favorability among "Democrats/liberals" fell to 18 percent in July compared with 39 percent in January, according to a survey by data analytics firm CivicScience. Among "Republicans/conservatives," Tesla's favorability fell to 22 percent in July compared with 36 percent in January, the firm said.

"The EV buyer base swings harder to the left in the U.S.," CivicScience said. "Democrats are twice as likely as Republicans to purchase an EV. Democrats are also more likely to associate Elon Musk with the brand and to be less interested in Tesla as a result."

Tesla may have a hard time recapturing some loyalists in places such as Silicon Valley now that they have broken with Musk over political and social issues and the CEO's overall temperament, said Mario Natarelli, managing partner at branding agency MBLM.

"It's unquestionable that this cloud of behavior has affected the brand," Natarelli said. "Tesla was the EV leader, the most innovative, represented by a visionary, someone ... looking to make the planet healthier. Now people are selling their Teslas, ashamed to even drive them because of the association with him."