California New Car Dealers Association Releases Q1 2026 Auto Outlook

Contact: Autumn Heacox, Director of Communications & Marketing: aheacox@cncda.org, (916) 441-2599 x105

Q1 2026 CA Auto Outlook: ZEV Market Share Hits Lowest Point Since 2021

Tesla Registrations Fall 24 Percent as EV Demand Cools Across California

SACRAMENTO, CA (April 21, 2026)— Today, the California New Car Dealers Association (CNCDA) released its Q1 2026 California Auto Outlook report, providing a first-quarter analysis of statewide new vehicle registration trends. All data in the report is sourced from Experian Automotive and must be cited when referencing these findings.

Key Takeaways

California’s new vehicle market opened 2026 with registrations declining 8.9 percent compared to the first quarter of 2025. The U.S. market fell 4.6 percent over the same period.

After rising 3.1 percent in 2025 to 1.80 million registrations, California’s total new vehicle market is projected to decline to 1.74 million units in 2026. Elevated transaction prices, tariff uncertainty, high interest rates, and near-record-low consumer confidence are the primary headwinds. Pent-up replacement demand and an aging vehicle fleet are expected to provide some support and limit steeper declines.

At the same time, momentum for electric vehicles continued to slow.

ZEV (zero-emission vehicle) market share fell to 13.7 percent in the first quarter of 2026, down from 21.0 percent for full-year 2025 and well below the 22.0 percent peak recorded in 2024. This is the lowest ZEV market share recorded since the fourth quarter of 2021. Total ZEV registrations declined 40.2 percent compared to the first quarter of 2025.

The pullback reflects a combination of factors, including the phase-out of federal BEV tax credits, sustained affordability pressures, and broader market softening.

California’s share of total U.S. ZEV registrations was 29.6 percent in the first quarter of 2026.

Hybrids Shine as Californians Seek Practical Options

While ZEV demand dipped, hybrid vehicles continued to gain serious momentum. Hybrid registrations exceeded 87,000 units in the first quarter of 2026, accounting for 20.9 percent of the market. That figure virtually matches ZEV market share at its 2025 annual peak. Notably, every hybrid vehicle registered in California during the first quarter was sold through a franchised new car dealership.

Gas-powered vehicles remained the single largest segment of the market, accounting for 61.1 percent of all new vehicle registrations in the first quarter of 2026, up from 54.0 percent in all of 2025.

“California consumers continue to rely on their local dealers to help them navigate a rapidly shifting market,” said Jessie Dosanjh, Owner of Stevens Creek Chevrolet and CNCDA Chairman. “Whether a customer is considering hybrid, traditional, or even an EV, dealers provide the guidance, inventory, and service to match the right vehicle to how Californians actually live and drive.”

Model Rankings Revisited

California’s first-quarter model rankings reflect continued strength in hybrid-equipped mainstream vehicles and steady demand across core passenger car and light truck segments.

The Toyota Camry was the top-selling passenger car in California, posting 14,905 registrations and capturing 52.8 percent of the midsize and large car segment. The Honda Accord followed with 7,015 registrations (24.9 percent). In the small car segment, the Honda Civic led with 12,806 registrations, representing 30.8 percent of sales.

Among light trucks, the Tesla Model Y remained California’s top-selling model overall with 22,907 registrations, accounting for 53.3 percent of the luxury compact SUV segment. The Honda CR-V followed with 12,654 registrations (17.8 percent of the compact SUV segment), while the Toyota RAV4 recorded 12,003 registrations (16.8 percent).

Pickup demand remained solid. The Toyota Tacoma led compact and midsize pickups with 12,129 registrations (53.2 percent in that segment), while the Ford F-Series topped the full-size pickup segment with 9,337 registrations, followed by the Chevrolet Silverado at 7,966 registrations.

Brand Performance Highlights

Most major brands reported declines in registrations in the first quarter, reflecting broad market contraction. Seven of the top 30 selling brands recorded increases: Lucid, Mitsubishi, Genesis, Lexus, Volvo, Chrysler, and Toyota.

Toyota finished the first quarter as California’s top-selling brand with 19.0 percent market share, up from 16.7 percent in the first quarter of 2025. Honda followed in second place with 10.4 percent of the market. Tesla registrations declined 24.3 percent compared to the first quarter of 2025, with market share falling from 9.2 percent to 7.7 percent. Among ZEV brands, Tesla’s share of the ZEV segment rose from 44.2 percent to 56.0 percent as competing electric brands posted steeper declines.

Regional Markets

Northern California saw registrations fall 13.1 percent to 118,804 units. Passenger cars declined 17.8 percent, while light trucks fell 11.6 percent. ZEVs accounted for 17.8 percent of the Northern California market.

Southern California registrations declined 9.3 percent to 234,926 units. Passenger cars fell 13.9 percent, while light trucks declined 7.5 percent. ZEVs represented 13.7 percent of registrations.

Click Here to Read the Q1 2026 California Auto Outlook.

###

California Auto Outlook Quarterly is produced for CNCDA by Auto Outlook, Inc., an independent research company that analyzes statewide and regional automotive markets. When reporting these auto industry trends, please acknowledge the Data Source: Experian Automotive.

The report provides comprehensive information on California’s new vehicle market, including annual trends, a two-year perspective, vehicle powertrain dashboard, segment watch, the top five models in each segment, brand scoreboards, regional comparisons, and more. Visit www.cncda.org. 

About CNCDA

For over 100 years, the California New Car Dealers Association has represented California’s franchised new car and truck dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles and provide automotive products, parts, services, and repairs.

In 2025, California’s franchised new car dealers sold more than 1.8 million new cars and trucks, employed almost 138,000 people, paid $9.16 billion in state sales tax, and donated $72.09 million to charitable and civic organizations. CNCDA is the nation’s largest state association of franchised automotive dealers, with nearly 1,200 members. We provide dealer advocacy, as well as legal, compliance, and regulatory support.