Californians purchased a record number of zero-emission and plug-in hybrid vehicles in the third quarter of 2025, seizing their final opportunity to claim federal tax incentives before they were eliminated under President Trump\u2019s sweeping budget cuts.<\/p>\n
California residents bought more than 124,700 zero-emission vehicles or plug-in hybrids from July 1 to Sept. 30, marking the highest quarterly sales<\/a> of clean vehicles since the state began tracking those numbers in 2008, according to the California Energy Commission. Electric vehicles and long-range hybrids made up 29% of new car sales statewide<\/a>, capturing the largest quarterly market share in that 17-year span.<\/p>\n Consumers rushed to dealerships to take advantage of expiring, Biden-era tax credits, which offered up to $7,500 toward buying or leasing new zero-emission or hybrid vehicles. The incentives were vital in making EVs more affordable, given their batteries had primarily been made with expensive rare earth minerals, adding to sticker prices compared to gas-powered vehicles.<\/p>\n Now, for the first time in more than a decade, EVs must compete with their gas-powered cars without government-funded discounts. Although EV model lineups have expanded and prices have become more competitive, they remain $5,000 to 10,000 more expensive than comparable gas models, raising concerns about whether California will maintain momentum on its clean car goals. <\/p>\n \u201cMost of the major brands that our dealers represent have one or more EVs that are available today \u2014 and many more in the pipeline,\u201d said Brian Maas, president of the California New Car Dealers Assn., which represents over 1,200 franchised new-car dealers statewide. \u201cSo EVs are here to stay. The question is, at what sales level?\u201d<\/p>\n The top-five counties with the highest share of EV sales were all in the Bay Area. Santa Clara, where nearly 47% of vehicle sales were zero-emission or hybrids, led the way. EV sales were also high in Orange and Los Angeles counties, accounting for nearly 36% and 31% of total car sales in the quarter, respectively. <\/p>\n Tesla remained California\u2019s top-selling EV car brand by far. <\/p>\n But its third-quarter sales this year fell by nearly 7% compared to the same period in 2024. The big winners seem to have been Honda and Volkswagen, whose zero-emission sales in California more than doubled year-over-year; Audi wasn\u2019t too far behind, with sales increasing 90%. <\/p>\n Ford also did well, posting record national sales<\/a> of its electrified Mustang Mach-E and F-150 Lightning \u2014 more than 15% of which were sold in California. <\/p>\n Maas said he anticipated \u201cgangbuster\u201d third-quarter sales with the impending demise federal tax credit, which allowed for a markdown of over 10% on most EV models. But many of these were \u201cpulling-forward\u201d sales \u2014 purchases by consumers who would have bought later, if not for the expiration of the federal incentives. <\/p>\n Many American car companies, including Ford and General Motors, have reported they are forecasting future declines in EV sales, citing federal policy changes.<\/p>\n Maas is among a chorus of industry experts who tend to agree.<\/p>\n \u201cI think any economist expects there to be a dropoff,\u201d he said. \u201cIt\u2019s unclear how far that dropoff is going to be. Dealers have been trying to figure out what\u2019s the natural level of EV sales without credits, and they\u2019re trying to align their inventory to reflect that.\u201d<\/p>\n Jessie Dosanjh, president of California Automotive Retailing Group, operates 20 dealerships in Northern California that sell numerous brands, including Chevrolet, Nissan, Acura, Toyota, Infinity, Ford and Hyundai. In August and September, Dosanjh said, dealership floors were more crowded than usual with customers seeking EVs. He advised his employees to inform customers, if they ever considered buying an EV or hybrid, they had a limited window to get the best price.<\/p>\n \u201cIt is absolutely a significant amount of money, especially when you look at the leases,\u201d Dosanjh said. \u201cIt\u2019s a couple hundred dollars [a month], on average.\u201d<\/p>\n Even with the record quarterly sales, this year\u2019s overall sales still slightly lag behind 2024. <\/p>\n A flurry of tariff announcements<\/a>, mixed economic forecasts and political backlash against Tesla Chief Executive Elon Musk contributed to slumping EV sales in the first half of the year, according to experts.<\/p>\n Environmental deregulation and disinvestment by the Trump administration has rocked market expectations for EV sales. <\/p>\n In addition to ending the federal tax credits, the Trump administration and federal lawmakers chose to not reauthorize a law<\/a> that gave EV drivers nationally the privilege of driving alone in carpool lane, a popular perk to avoid congested highways. Trump also signed a law revoking federal waivers that allowed California to require automakers to sell increasing percentage of zero-emission vehicles to dealerships statewide, starting with 35% all new vehicles sales in 2026. <\/p>\n The regulatory changes has left dealers rethinking the makeup of the vehicles on their lots. <\/p>\n \u201cIf I were a betting person, I would say that EV demand will drop off several percentage points,\u201d Dosanjh said. \u201cTo what extent, I don\u2019t know. I don\u2019t think that those consumers will necessarily not buy a car. I think they\u2019ll see a shift to more hybrid vehicles that provide some of the benefits, as far as range and savings. And I also see consumers considering perhaps cheaper internal combustion engine vehicles.\u201d<\/p>\n Gov. Gavin Newsom had previously vowed<\/a> to restore a state program that provided up to $7,500 to buy clean cars, if Trump terminated federal tax credits. However, while taking questions from reporters at a Sept. 19 bill signing ceremony<\/a>, Newsom walked back that commitment.<\/p>\n \u201cWe can\u2019t make up for federal vandalism of those tax credits,\u201d Newsom said. \u201cBut we can continue to make the unprecedented investments in infrastructure, which we\u2019re doing.\u201d<\/p>\n The governor\u2019s press office did not respond to a request for comment on his change in stance. <\/p>\n