California New Car & Truck Sales Plunged 21.7% in 2020, Far Worse than US Total. Even Tesla Sales Fell. Nissan’s Collapsed. But EV Market Share Rose to 6.2%

Even the huge used car market has been crushed, with the exception of older, cheaper used vehicles.

By Wolf Richter for WOLF STREET.

According to the California New Car Dealers Association (CNCDA), new car and light truck registrations in California fell 21.7% in 2020. This was the fourth consecutive decrease and the largest percentage decrease since 2009 to 1.64 million vehicles. Sales to private customers were down 16.8%, while sales to fleets such as rental car companies were down 39.5%.

By comparison, total sales of cars including fleets in the United States fell by a total of 14.4% in 2020 to 14.65 million vehicles. For California and the US, 2016 was the highlight. California made up 11% of US auto sales, with approximately 12% of the US population:

There is a time difference between “Registrations” (the dates for California) and “Deliveries” (the dates for the United States). After a vehicle has been “delivered” by the dealer to the end customer, it takes a while before it is “registered” with the DMV. However, the time difference is roughly the same every year, so the difference compared to the previous year generally cancel out.

Registration declined in all four quarters year over year and has now declined year over year for 15 consecutive quarters:

  • Q1: -4.3%
  • Q2: – 48.9%
  • Q3: -19.6%
  • Q4: -12.6%

All automakers saw sales declines in California in 2020, from a staggering 43% slump at Nissan / Mitsubishi to a 4.4% drop at Volvo, the smallest automaker in California.

Tesla’s registrations fell 4.6% to 71,390 in the year under review. As Tesla increased its global sales to nearly 500,000 vehicles in 2020, California’s share of Tesla’s global sales dropped from 20% in 2019 to 14% in 2020.

Even sales of battery-electric vehicles fell by 4.7% year-on-year to 101,628 vehicles. However, this decline was small compared to the collapse of the overall market, so that BEV’s market share rose to a record 6.2%:

Toyota has been the undisputed number 1 in California for many years, with a huge market share advantage over Honda and GM. In the US overall, GM was number 1, Toyota number 2, Ford number 3, Fiat-Chrysler number 4, and Honda number 5. Tesla is highlighted in red so you can easily see it on the list. Tesla’s share of the total California market rose from 3.8% in the previous year to 4.4%.

Even the huge used car market was crushed.

Used vehicle registrations fell by 8.5% to 3.5 million vehicles. The used car market is huge and more than twice the size of the new car market (1.64 million).

This decline is due to used car prices, which exploded by 15% between July and October 2020 after massive supply disruptions on the wholesale markets. Since then prices have calmed down somewhat, but remain 10% higher year-on-year.

Given this price scenario and the California unemployment crisis, sales of older and cheaper used vehicles (7-10 years old) increased while sales of newer and more expensive used vehicles decreased:

  • 3 years or newer: -11.2%
  • 4-6 years old: -6.9%
  • 7-10 years old: + 3.3%

All hopes are now directed towards the first quarter.

Certainly auto sales can’t get any worse, one thinks, and that may be true. And when it comes to dealers, they benefit because the prices are brand new.

In addition to the supply chain tangles the industry has had to grapple with, automakers continue to experience supply disruptions as a current shortage of chips is affecting the production of new vehicles.

So supply was scarce and could get tighter despite the sharp drop in demand – unlike during the financial crisis, when demand collapsed and supply continued to pile up and millions of vehicles were stored in ports of entry and on land across the country. During the pandemic, demand has decreased, but supply has continued to decrease, and prices are high and rising despite the drop in demand.

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