“Relatively high interest rates, elevated vehicle transaction prices, and stagnant real personal incomes have made a new vehicle purchase a stretch for many consumers,” says their latest quarterly report covering the first half of 2026.

 

Registrations fell 9.1% in the first quarter and 6.3% in the second. Some 864,848 new light vehicles were registered compared with 936,543 during the same period in 2025. California auto sales dropped more than US sales that fell 2.8%. 

 

Meanwhile Zero Emission Vehicles (ZEV) registrations  were down nearly 25% while hybrid vehicles climbed, accounting for 22.1% of California’s new vehicle market through June, the highest share in the report’s data series and up from 19.5% for all of 2025. Hybrid share has now increased in each of the past four years. Quarterly share climbed from 20.9% in the first quarter to 23.2% in the second.

 

The quarterly trend points to a possible floor for electric vehicle sales. ZEV share fell from 24.9% in the third quarter of 2025, before the federal tax credits expired, to 13.8% in the first quarter of 2026. It then recovered to 17.8% in the second quarter says the dealer report.

California continues to lead the nation on electric vehicle adoption by a wide margin. The state’s ZEV share of 15.9% was nearly three times the U.S. figure of 5.9%, and California accounted for 29.1% of all ZEV registrations nationwide.

 

New state incentives 
While ZEV sales for the remainder of 2026 are expected to remain at roughly current levels, the state’s new point-of-sale rebate program, MyFirstEV, is expected to be implemented in the coming weeks, which could provide additional momentum for ZEV sales. 

 

MyFirstEV, the instant rebate program established by the legislature and signed by Governor Newsom, takes effect next month, with 13 automakers offering instant rebates to first-time ZEV buyers.

“This is an exciting time for prospective EV buyers in California,” said California Energy Commissioner Nancy Skinner. “There are many affordable new and used EV models available, and the MyFirstEV program will give thousands of Californians the chance to ditch their increasingly expensive gas vehicles. As California continues to rapidly build out a reliable and publicly available fast charging network, there has never been a better time to go electric.”  

“Nearly 1 in 5 Californians are choosing to go electric because EVs are fun to drive, fast, and cheaper to fuel and maintain,” said California Air Resources Board Chair Lauren Sanchez. 

 

Here’s what buyers need to know: 

$3,500 off new electric vehicles with an MSRP up to $50,000$1,750 off used electric vehicles sold for up to $25,000 through manufacturers’ pre-owned vehicle programs

The rebate is open to any Californian buying their first ZEV.

As gas prices climb here and across the nation, motorists are likely to look for more fuel efficient  transportation in the second half of 2026.

Model rankingsThe Toyota Camry was the top-selling passenger car in California with 33,527 registrations, capturing 55.2% of the midsize and large car segment. The Honda Accord followed with 15,933 registrations (26.2%). The Honda Civic led small cars with 27,897 registrations, or 32% of the segment.

The Tesla Model Y remained California’s top-selling model overall with 54,327 registrations, accounting for 57.5% of the luxury compact SUV segment. The Honda CR-V led compact SUVs with 27,670 registrations at 19.3%.

Pickup truck demand held steady. The Toyota Tacoma led compact and midsize pickups with 24,254 registrations at 52.3%. The Ford F-Series topped full-size pickups with 18,654 registrations at 28.1%.

Faraday Future stock drops to 7 cents

With its only manufacturing plant in Hanford, California, Faraday Future has been under more financial pressure this year. The company’s stock has declined from $1.25 at the first of the year to about 12 cents in recent days. On July 22, it dropped to just 7 cents.

On July 21, 2026, Faraday Future Intelligent Electric Inc announced plans for a 1-for-150 reverse stock split to take effect on July 24, 2026. This move will reduce the number of outstanding Class A shares from approximately 384.5 million to 2.56 million. The primary aim of this action is to ensure compliance with the Nasdaq’s minimum bid price requirements.

The LA-based company is in danger of once again losing its NASDAQ listing with its stock falling below $1. A reverse stock split consolidates the number of existing shares into fewer ones, which can help increase the stock price per share, although it amounts to a temporary reprieve rather than any kind of fix for its ongoing financial troubles.

The giant Hanford plant has pivoted this year to making more robots and fewer electric cars in the past six months. The big issue, there is little evidence the cars are selling. Maybe robots?