California, once Tesla’s flagship stronghold, is becoming an increasingly problematic region for Elon Musk. The automaker recorded its seventh consecutive quarterly drop in registrations in the state, with a more than 20% decline in Q2 2025. This comes despite the fact that the broader car market in California has actually expanded in the first half of the year.

While Tesla’s newly opened retro diner in West Hollywood is drawing crowds, the company’s core automotive business is clearly cooling down.

🔹 Tesla is dragging down the entire California EV segment – battery electric vehicles accounted for only 18.2% of new registrations in Q2, compared to 22% a year ago.

🔹 Analysts point to growing discontent with Elon Musk’s controversial public and political activity, especially in the predominantly liberal state.

Financial Results in the Shadow of Trouble

Tesla is set to release its Q2 financials soon, but we already know that vehicle deliveries fell 13.5% year-over-year – marking the second global quarterly drop in a row. Although the updated Model Y has been delivered to dealerships, it has failed to reignite demand. And despite its 2023 debut, the Cybertruck remains a niche product – only 11,000 units have sold so far this year.

Perks Are Ending – Tesla Fights to Stay Afloat

Tesla is also bracing for the expiration of the $7,500 federal EV tax credit in September, which will remove a major incentive for buyers. In response, Tesla has rolled out benefits like free supercharging and complimentary transfer of the full self-driving feature to encourage purchases before the credit vanishes.

More concerning is the end of the emissions credit system, which has long supported Tesla’s balance sheet. The program allowed traditional automakers to buy emissions offsets from EV makers like Tesla – generating over $10 billion in revenue, or around one-third of Tesla’s total profits. This program ends on September 30.

Musk has openly said that these credits kept Tesla alive – and even saved it from bankruptcy in 2019. But Trump’s new law, “One Big Beautiful”, repealed the EV mandate, reduced credit programs, and ignited a public feud with Musk. Analysts at William Blair are already questioning the long-term viability of Tesla’s credit-driven advantage.

Retro Diner, Popcorn... and Protests

Meanwhile, Tesla officially opened a retro diner with a drive-in cinema and Optimus robot bartender on July 21 in West Hollywood. But instead of celebration, protest is brewing.

Activists from the Tesla Takedown initiative announced a protest outside the restaurant on July 26, calling the venue a “symbol of Musk’s authoritarian arrogance.”

Joel Lava, one of the organizers, told The Verge that “Elon Musk is not welcome in West Hollywood” and expects a large turnout. Despite smaller protest numbers since spring, around 20 people still gather weekly at Tesla’s LA factory, motivated by reports of falling sales, weak earnings, and allegedly spoiled USAID food due to DOGE law cuts.

Lava states:

“Tesla funds fascism. Every dollar you give them destroys the fabric of this country. You should not walk into that diner.”


#Tesla , #stockmarket , #ElonMusk , #worldnews , #TRUMP

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