Zero-emission vehicles accounted for nearly one-in-four new light-vehicle sales in California during the third quarter as buyers rushed to take advantage of the expiring federal tax credit, a new report shows.
The California New Car Dealers Association’s Q3 2025 California Auto Outlook showed ZEVs reached a 24.7% market share before the credit expired in September, up from 22% a year earlier.
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Overall new-vehicle registrations in the state rose 5.4% year to date and 3.6% in the quarter compared with the same period in 2024, reflecting steady growth across most segments.
Toyota led California’s market with 17.4% of new registrations, followed by Honda, Tesla, Ford and Chevrolet. Tesla’s market share declined for a second straight year, down 9.4% in the quarter and 15.1% year to date, while Toyota posted gains across several models. The Toyota Camry overtook the Tesla Model 3 as the state’s top-selling passenger car, the report shows.
Hybrid and plug-in hybrid vehicles made up 19.1% of the market, with combined electrified vehicle sales including ZEVs, hybrids and plug-in hybrids rising to 44.1% of all registrations.
Related: Tesla Slumps Below 50% Share of California’s Electric Car Market
The outlook shows continued growth in California’s new-vehicle market, with steady momentum heading into the last quarter of the year.
Northern California led in registration gains and ZEV share, while economists expect overall sales to stabilize following the expiration of federal EV tax credits. According to the report, the state’s total new-vehicle registrations are projected to reach 1.74 million units in 2025, a slight increase from 2024.
The data in the report came from Experian Automotive.
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