ZEV Registrations in California Fell for the First Time Since 2020

Zero-emission vehicle registrations fell in California 2025 after several years of growth following the pandemic.

This marks the first year-over-year decline in ZEV registrations since 2020, a new report from the California New Car Dealers Association shows. The group’s Q4 2025 California Auto Outlook report is a full-year analysis of statewide new vehicle registration trends.

The electric vehicle momentum the state has seen in recent years seems to have reversed course. ZEV registrations declined to 20.9% of the market in 2025, down from a peak of 22% in 2024.

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The registration data showed that consumer adoption softened materially in late 2025, raising questions about the pace of future growth in California’s ZEV market. ZEV registrations in November and December fell below 13%, a pullback that followed a third-quarter surge driven by the impending expiration of federal tax credits.

California remains a big state for ZEVs despite the decline. Its share of total U.S. ZEV registrations in 2025 was 28.5%.

Although ZEV demand cooled, hybrid vehicles continue to gain traction, and position strong year-over-year growth in 2025. Hybrid sales slightly outpaced ZEV sales in Q4 alone, grabbing 20% of the market, the report shows.

Gas-powered vehicles remained the single largest segment of the market, with 54% of new vehicle registrations in 2025.

Toyota ended 2025 as California’s top-selling brand, with 17.8% market share. The Toyota Camry remained the top-selling passenger car in California, with 62,324 registrations. The Toyota Tacoma led compact and mid-size pickups with 45,258 registrations.

Tesla’s registrations fell 11.4 % in 2025, with its market share dropping from 11.6% in 2024 to 9.9% in 2025.

California’s new vehicle market is expected to soften in 2026. Registrations are projected to dip 1.5% to just under 1.8 million units this year due to higher transaction prices, tariff pressure, and a cooling labor market, the report states.