On the Dash:
- Tesla registrations dropped 24%, even as the Model Y remained the state’s top seller.
- EV market share fell to a four-year low in California at 13.7% in Q1 2026.
- Hybrids now outsell EVs in California, capturing 21% of the new vehicle market.
Tesla vehicle registrations in California tumbled 24% in the first quarter of 2026. Consumers increasingly embraced hybrid vehicles as electric vehicle momentum continued to slow. That’s according to new data from the California New Car Dealers Association (CNCDA).
California sets the pace for national EV trends
California has long been considered the nation’s leading indicator for electric vehicle adoption. The state recorded a 40% drop in total zero-emission vehicle (ZEV) registrations compared to the same period last year. ZEV market share fell to 13.7%, the lowest level since the fourth quarter of 2021. That figure sits well below the 22% peak recorded just two years ago.
Tesla’s Model Y still dominates
Tesla’s Model Y remained California’s best-selling vehicle of any kind. The model posted 22,907 registrations and commanded 53% of the luxury compact SUV segment. Still, the brand’s overall decline signals weakening demand even for the state’s top nameplate. The Honda CR-V followed with 12,654 registrations. The Toyota RAV4 recorded 12,003.
Hybrids gain ground over EVs
Hybrid vehicles gained serious momentum as ZEV demand dipped. Hybrids topped 87,000 registrations in the first quarter, capturing roughly 21% of the market. The Toyota Camry hybrid climbed to number two on the state’s best-sellers list, trailing only the Model Y.
California proposes new EV rebates
Now that federal EV incentives have expired, California Governor Gavin Newsom has proposed a $200 million state tax rebate program. The goal is to offset lost federal credits and bolster slumping sales. The program requires matching funds from automakers, includes income limits, and covers both new and used EVs.
