© Reuters. FILE PHOTO: A Tesla vehicle drives past Tesla’s primary vehicle factory in Fremont, California, U.S. May 11, 2020. REUTERS/Stephen Lam/File Photo

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By Hyunjoo Jin

SAN FRANCISCO (Reuters) -Tesla’s market share in its key California market tumbled in the first quarter of the year despite aggressive price cuts as rivals stepped up, data showed on Friday.

Tesla (NASDAQ:TSLA) Inc controlled 59.6% of the battery electric market in California from January to March, down from 72.7% for all of 2022 and the lowest since 2017, according to Reuters calculations based on data from the California Energy Commission.

Rivals such as Volkswagen AG (OTC:VWAGY), General Motors Co (NYSE:GM)’s Chevrolet and Kia Corp increased their market shares in California during the period, although they remain in the single digits each.

Tesla’s sales in California accounted for 16% of the automaker’s global deliveries last year, according to Reuters calculation. California is the biggest U.S. state for zero emission vehicles.

Tesla CEO Elon Musk’s pursuit of Twitter and embrace of Republicans has sparked concerns about Tesla’s brand, especially in liberal states like California.

Tesla has been slashing prices in the United States since January, cutting prices six times in the key market.

The price cuts, which were also carried out in China, Europe and other countries, hit Tesla’s first-quarter margins, pushing its shares down nearly 10% on Thursday.

Musk this week signaled the EV maker would prioritize sales growth ahead of profit in a weak economy.