California EV sales drop as experts say federal policy shifts reshape market
California's goal of having 100% of new cars sold be electric vehicles by 2035 may be hitting a roadblock.
A new report shows a steady decline in sales over the past six months, but experts say that while electric vehicle sales have dropped, they will likely bounce back sooner than we think.
The latest report from the California New Car Dealers Association shows zero-emission vehicles made up just 13.7% of the market in the first quarter, down sharply from 21% for all of 2025 and marking the lowest share since late 2021. Total EV registrations dropped more than 40% year-over-year.
The report also found that overall, new vehicle registrations in California fell 8.9% compared to the same time last year, a steeper decline than the 4.6% drop seen nationwide.
"This is the result of policy choices at the federal level," said Ethan Elkind, Director of the Climate Program at UC Berkeley Law.
The Trump administration ended the federal tax credit of $7,500 for EV buyers in September. Without that incentive, Elkind says it is not surprising sales have declined.
Federal lawmakers also moved to weaken fuel economy standards and eliminate California's authority to require automakers to sell more zero-emission vehicles.
"If auto makers don't comply with federal fuel economy standards, there's no penalty for them. They can get away with it without any monetary damage," Elkind said. "There's now no incentive to comply with federal fuel economy standards and they no longer need to comply with California's zero emission vehicle mandate."
While policy changes could slow progress toward the 2035 goal, Elkind says advances in battery technology and growing global competition from China could still drive prices down over time.
"There's a global market for these electric vehicles. They're very inexpensive and as this progress continues and prices come down, at a certain point, there's not a lot we can do policy-wise to keep these vehicles out," Elkind said.
In the meantime, the California New Car Dealers Association says some buyers are looking for a middle ground. More than 80,000 hybrids were sold last quarter, as some drivers look for the best of both worlds.
In fact, hybrid vehicles accounted for more than 20% of all new car sales in California, nearly matching the peak market share electric vehicles saw last year.
"Californians want an electric vehicle, they want the gas savings that come with an electric vehicle, but they still have some anxiety around charging infrastructure, charging capabilities," said Autumn Heacox, spokeswoman for the association. "EVs require a lifestyle change in a lot of cases."