Tesla Tops California Sales Charts as Traditional Dealers Lose $910M Profit Opportunity

By Kevin Armstrong
Tesla's consumer model lineup
Tesla's consumer model lineup
Tesla

Tesla's Model Y emerged as the best-selling vehicle in California's new vehicle market in Q1 2023, marking a significant milestone in the increasing shift toward electric vehicles. However, this achievement comes at a cost to traditional car dealerships, which lost an estimated $910 million in potential profit in 2022 due to the rise of Tesla and other direct-to-consumer manufacturers.

Tesla Model Y Leads the Pack in California's New Vehicle Market

The Model Y, a luxury compact crossover electric SUV, accounted for a staggering 64.5% of Luxury Compact SUV sales in the state. Despite supply chain issues and limited vehicle inventories impacting the sales results of many models, the Tesla Model Y has managed to claim a substantial market share, underlining the growing popularity of electric vehicles among California’s consumers.

Traditional Dealerships Feel the $910M Pinch as D2C Sales Skyrocket

According to a recent report by Automotive News, the direct-to-consumer sales model adopted by Tesla, Rivian, and Lucid has significantly disrupted traditional dealerships. Out of the 193,707 direct-to-consumer EV sales, Tesla vehicles constituted a whopping 97.1%, resulting in a gross profit loss of roughly $700,000 per dealer and a $910 million loss for dealers cumulatively.

The most prominent losers in this transition were the state’s luxury brands, especially those currently lacking EV offerings. The higher average sales prices of EVs from Tesla, Rivian, and Lucid meant these losses were felt most acutely by luxury dealerships.

Future Market Trends: Intense Competition and Emerging Opportunities

The landscape of California's EV market could become more competitive. As traditional automakers ramp up their EV offerings, they will be vying for a piece of the pie in a market that has seen a surge in new vehicle registrations, especially in the luxury SUV and EV segments.

However, Tesla's significant profit margin lead over its competitors could still pose a substantial challenge for traditional dealerships, making price competition a tough battle.

Tesla's impressive performance in California's new vehicle market signals a significant shift in consumer preferences and a major disruption in traditional car dealership models. The future will likely see more EVs, more competition, and perhaps more opportunities for those who can keep up with the rapid pace of change in the automotive industry.

Ordering a New Tesla?

Consider using our referral code (karan29050) to help support our site and get up to $2,000 off your Tesla.

Tesla Updates Santa Mode & Rainbow Road to Use Ambient Lighting and Updates SteamOS [VIDEO]

By Karan Singh
Flo / Roberto Bonato

While Tesla’s 2024 Holiday Update brought many new features, including Apple Watch Support, Cross Traffic Alerts, Weather Overlays, Search Along Route, and others, there are also several smaller items in this update that didn’t get much attention.

Ambient Lighting Now Affects Easter Eggs

The 2024+ Model 3 and Cybertruck both come equipped with ambient lighting, and Tesla is now taking advantage of this custom lighting feature by incorporating it into several easter eggs.

Rainbow Road: If you head over to Apps > ToyBox > Rainbow Road, you’ll find a new option available that allows the ambient lighting in the vehicle to also change shades while Rainbow Road is active. The Rainbow Road easter egg is a tribute to the iconic course course in Nintendo’s Mario Kart.

Check out the feature in action below:

Santa Mode: Just in time for Christmas, Tesla has improved Santa Mode by cycling the ambient lighting between Christmas colors. Similar to Rainbow Road, the use of ambient lighting for the easter egg is optional and can be enabled under Apps > ToyBox > Santa Mode.

When using Santa Mode with ambient lighting turned on, the lights will cycle just between Christmas colors, red, green and white, instead of the full rainbow. There’s a video of the feature below:

Update: It looks like it affects other Easter eggs as well, such as turning orange when using Romance mode.

SteamOS (Beta) Update

The Model S and Model X vehicles that support Steam gaming are receiving a Steam app update in the holiday update as well. This update could end up being very interesting, but for now Tesla says that the SteamOS, which also runs on Valve’s Steam Deck has been updated to version 3.6.

Valve outlines a wide range of fixes and improvements in their release notes for version 3.6, but Tesla simply states that the OS update includes performance enhancements and improved game compatibility.

The SteamOS hasn’t been updated on the Model S and X for quite a while, so we believe there may be more to this besides performance improvements and fixes. We’ll be looking to share some insights into this in the near future.

So, there you have it—three new features in the Holiday update that have mostly gone under the radar. While they may not apply to everyone, there are plenty of other cool features in the Holiday Update, like the arrival of Dynamic Road Closure Routing and Nearby Parking, that are coming to every vehicle, so go check out the full release notes.

New Report Offers Specs & Price for Tesla's Upcoming Next-Gen Model

By Karan Singh
A concept of Tesla's 'Model Q'
A concept of Tesla's 'Model Q'
@DominicBRNKMN on X

At the 2023 Q3 Earnings Call, Tesla provided an update on its next-generation model, what many are referring to as the “Model 2” or “Model Q.” Although the actual model name is yet to be determined, it is known internally as Redwood.

During the 2024 Shareholder Meeting, Musk again mentioned the upcoming model, saying that Tesla is working on new products, including a more affordable vehicle and a larger SUV.

While we know the next-gen vehicle is aimed at the $25k to $30k USD market, we now have some new information thanks to a new report out of China.

Launch & Price

According to the Chinese outlet CNMO Technology News (Sina Finance), Travis Axelrod, Tesla’s Head of Investor Relations, announced plans to launch a new model. Axelrod shared this update while addressing senior corporate investors at an investor conference hosted by Deutsche Bank on December 5, 2024.

The goal of Project Redwood, internally dubbed “Model Q” by Deutsche Bank, is to achieve a post-subsidy price of under $30,000 USD. With the Federal EV Rebate potentially expiring next year, this suggests that the Model Q’s starting price will be around $30,000 USD. For comparison, the Model 3 currently starts at $42,490 in the U.S.

We previously reported that Tesla has already been speaking to suppliers and is looking to begin volume production of the vehicle sometime around June 2025. Of course, prototyping is still necessary, but we haven’t seen any signs of Tesla testing a new vehicle since spotting the Cybercab on the streets ahead of We, Robot.

Specs

The Model Q will supposedly be about 15% smaller and 30% lighter than the Model 3, with an approximate length of 3,988mm, or 157 inches. For scale, the Mini is 157 inches, while the Model 3 is 185 inches, so it’s fairly compact.

The battery will also be smaller to match the vehicle’s smaller size as Tesla tries to reduce the vehicle’s price while maintaining a similar range as its other vehicles. Tesla is expected to offer two models—a single-motor RWD model and a Long-Range Dual-Motor AWD variant.

The lower trim level will include a 53 kWh lithium iron phosphate (LFP) battery, while the AWD version is expected to include a 75 kWh LFP battery. The report says that the vehicle will be able to travel up to 500 km (310 miles) on a single charge, but it’s not clear whether this will be for the more efficient RWD version or the AWD variant.

Given the vehicle’s weight reduction compared to the Model 3, this type of range is likely for the lower trim level.

Variant

Motors

Battery Size

Estimated Range

RWD

1

53 kWh (LFP)

310 miles (500km)?

AWD

2

75 kWh (LFP)

?

There’s no news yet on the price of the AWD version, but we expect it to be about $5,000 more expensive than the RWD variant.

Once the vehicle ramps up in production, Tesla intends to produce about 10,000 of these per week globally or about 500,000 per year. As Tesla mentioned during one of their previous earnings calls, this next-gen vehicle will be built using Tesla’s current assembly lines with minimal changes. This should allow for a smoother and more predictable production ramp. While Tesla still plans to use its new unboxed assembly process, it’s now saving it for the robotaxi.

Project Juniper

One of the items that came up during the investor conference was Tesla’s Project Juniper—the Model Y refresh. Juniper has already had a few leaks, including some images and information that mention a return to the 7-seat, 3-row format—at least in China

We’re expecting Juniper to launch early next year, as production has supposedly already begun at Giga Shanghai, at least on a limited prototyping basis. If the rollout matches the Model 3 Highland refresh, we’ll see Juniper arrive in China first and then make its way to North America and Europe by the end of 2025. The performance variants should launch in early 2026, after the standard models.

If you’re excited about Juniper, so are we! Check out our wishlist of features for Tesla’s Model Y refresh, and see everything we know so far.

Latest Tesla Update

Confirmed by Elon

Take a look at features that Elon Musk has said will be coming soon.

More Tesla News

Tesla Videos

Latest Tesla Update

Confirmed by Elon

Take a look at features that Elon Musk has said will be coming soon.

Subscribe

Subscribe to our weekly newsletter