State’s New Vehicle Registrations Rebound
California Hybrid Market Share Hits New Record
California New Car Dealers reported a downturn in vehicle sales during the first 9 months of 2026 but cheered an improvement most recently in the third quarter. So far this year California new light vehicle registrations fell 4.2 percent
California’s new vehicle market returned to growth in the third quarter, with registrations rising 3.9 percent compared to the third quarter of 2025 and improvement from the 6.6 percent decline in 2Q.
Statewide registrations are projected to reach 1.75 million units for all of 2026, down 2.7 percent from 2025. Elevated transaction prices, rising interest rates, tariff pressure on vehicle prices, and household incomes that have not kept pace with inflation continue to weigh on affordability and sales.
Hybrids Reach a New High
Hybrid vehicles accounted for 22.8 percent of California’s new vehicle market through September, the highest share in the report’s data series and up from 19.5 percent for all of 2025. Hybrid share has now increased every quarter of 2026, climbing from 20.9 percent in the first quarter, to 23.2 percent in the second, to 24.1 percent in the third
Franchised dealerships accounted for 75.4 percent of combined hybrid, ZEV, and plug-in hybrid registrations statewide. In the non-luxury passenger car segment, hybrids now capture more than 45 percent of all sales.
Gas-powered vehicles remained the largest single segment of the market at 56.3 percent of registrations, up from 54.0 percent in 2025.
ZEV registrations declined 26.1 percent through the first nine months of 2026 compared with a year earlier, falling to 215,467 units. ZEV market share was 16.4 percent year-to-date and 17.3 percent in the third quarter alone.
ZEV Market Stabilizes at Lower Level
After the sharp drop following the expiration of federal tax credits, the quarterly trend suggests a floor has formed. ZEV share fell from 24.9 percent in the third quarter of 2025 to 13.8 percent in the first quarter of 2026, then recovered to 17.9 percent in the second quarter before easing slightly to 17.3 percent in the third. California continues to lead the nation on electric vehicle adoption by a wide margin. The state’s ZEV share of 16.4 percent was more than two and a half times the U.S. figure of 6.2 percent, and California accounted for 28.9 percent of all ZEV registrations nationwide.
The state’s new point-of-sale rebate program, MyFirstEV, launched on August 3. Because the program was operational for less than two months of the third-quarter reporting period and included only a portion of the state’s ZEV brands at launch, meaningful market impact will become visible in fourth-quarter data and beyond.
Luxury Segments Drive Remaining EV Demand
The EV market in California is becoming increasingly concentrated at the top of the price range. ZEV and plug-in hybrid combined share exceeded 42 percent in the luxury car segment and reached 59 percent in the small luxury SUV segment through the first nine months of the year. In the non-luxury car segment, ZEV and PHEV combined share was just 2.3 percent. The gap underscores how affordability continues to shape powertrain decisions for most California households.
Model Rankings
The Toyota Camry was the top-selling passenger car in California with 52,224 registrations, capturing 54.8 percent of the midsize and large car segment. The Honda Accord followed with 25,057 registrations (26.3 percent). The Honda Civic led small cars with 42,238 registrations, representing 32 percent of the segment.
The Tesla Model Y remained California’s top-selling model overall with 86,099 registrations, accounting for 57.9 percent of the luxury compact SUV segment. The Honda CR-V led compact SUVs with 41,809 registrations at 19.4 percent. The Toyota RAV4 followed with 37,801 registrations at 17.5 percent.
The Toyota Tacoma led compact and midsize pickups with 36,330 registrations at 51.5 percent. The Ford F-Series topped full-size pickups with 28,507 registrations at 28.3 percent, followed by the Chevrolet Silverado at 24,248 registrations.
Toyota finished the first nine months as California’s top-selling brand with 19.2 percent market share, up from 17.5 percent a year earlier. Honda followed in second place at 11.0 percent of the market. Tesla ranked third at 9.3 percent, down from 9.9 percent.