California new light vehicle registrations increased 3.3 percent from 2024 to 2025, slightly below the 4.2 percent improvement in the nation, says the annual report from the California New Car Dealers Association.
As expected, the market declined in the fourth quarter, with registrations falling 1.9 percent versus the year earlier.
Likewise in 2026 California new vehicle registrations are predicted to decline slightly, predicts the report.
Sticker shock
Transaction prices nearing $50,000 are making new vehicle purchases a stretch for many consumers.
Additionally, tariffs will almost certainly lead to rising vehicle prices, the labor market is weakening, and household incomes are barely keeping pace with inflation, says the report.
However, the news isn’t entirely bleak. The average age of vehicles on the road is at a record high, partly due to postponed purchases since the pandemic. This resulting pent-up demand, coupled with the prospects of lower interest rates, should limit any potential decline in sales in 2026.
New vehicle registrations this year are predicted to slip below 1.8 million units and fall 1.5 percent from 2025.
ZEV sales declined sharply at the end of 2025.
New registrations of zero emission vehicles headed lower during the last few months of 2025 due to the expiration of federal government tax credits. ZEV share of the new vehicle market was 22.2 percent during the first ten months of 2025 and declined to just 12.8 percent in November and December.California’s share of total U.S. ZEV registrations in 2025 was 28.5 percent.
Hybrid registrations increased 36 percent last year, and market share reached 19.4 percent, up more than ten percentage points versus points three years earlier.
Notably, hybrid sales slightly outpaced ZEV sales in Q4 alone, capturing 20.4 percent of the market, reflecting sustained consumer interest in lower-emission options that do not require installation of charging infrastructure or major lifestyle changes.
Gas-powered vehicles remained the single largest segment of the market, accounting for more than half of all new vehicle registrations in 2025 (54 percent).
Model Rankings
California’s year-end model rankings underscore continued demand for both affordable and established, high-volume vehicles across passenger car and light truck segments.
The Toyota Camry remained the top-selling passenger car in California, widening its lead in 2025, posting 62,324 registrations and capturing 50.0 percent of the midsize and large car segment. The Honda Accord followed with 30,455 registrations (24.4 percent). In the small car segment, the Honda Civic led the market with 53,085 registrations, representing 30.4 percent of sales.
Among light trucks, the Tesla Model Y remained California’s top-selling model overall with 110,120 registrations, accounting for 8.2 percent of total light truck share. The Toyota RAV4 followed with 65,604 registrations while the Honda CR-V recorded 52,311 registrations.
Pickup demand remained strong. The Toyota Tacoma led compact and midsize pickups with 45,258 registrations (51.3 percent in that segment), while the Ford F-Series topped the full-size pickup segment with 39,502 registrations, followed by the Chevrolet Silverado at 33,634 registrations.
Toyota finished 2025 as California’s top-selling brand, with 17.8 percent market share, further widening its lead over competitors. Honda closed the year in second place, capturing 10.8 percent of the market.
Tesla sales drop
By contrast, Tesla registrations declined 11.4 percent in 2025 with market share dropping from 11.6 percent in 2024 to 9.9 percent in 2025 as it slipped to third place in the state. This extends a two-year downward trend for Tesla despite the temporary boost from federal incentives.