Honda’s CR-V was one of the best-selling vehicles in California in the second quarter. (Honda)
key takeaways:
- Hybrid vehicles accounted for nearly one in four California registrations in the second quarter, outpacing EV market share growth in the state.
- EV registrations fell 8.2% from a year earlier as affordability concerns, politics and the lack of federal incentives hurt demand.
- California partnered with 13 automakers to offer rebates for first-time zero-emission vehicle buyers in an effort to boost EV sales.
Another type of vehicle is quickly taking hold in America’s EV heartland.
Nearly one in four automobiles registered in California in the second quarter was a hybrid, according to newly released data from the California New Car Dealers Association.
That was higher than a year earlier and easily outpaced sales of electric vehicles, which accounted for 17.8% of total sales for the quarter.
Growing demand for hybrid cars, which offer both a gas tank and electric motor to improve fuel efficiency, is putting them on pace to surpass annual EV sales in the state for the first time since 2020.
These figures are a clear indication of a shift in car buying preferences in the US, as affordability concerns, political stances and the end of federal subsidies have dampened EV demand.
Hybrids, meanwhile, have benefited as the war in Iran has pushed up gas prices. According to AAA, the national average for a gallon of gas was $4.02 as of July 21, while the California average is $5.52.
(Megan Warner/Bloomberg)
More on hybrids
California – the nation’s largest market for plug-in vehicles, with a robust charging network – has long been viewed as a proxy for America’s EV sector. Registrations of zero-emission vehicles in the state fell 8.2% last quarter from a year earlier.
Jesse Dosanjh, president of the dealers association and owner of Stevens Creek Chevrolet, said in a statement that the data shows buyers are influenced by budgetary concerns and their particular driving needs. “At the moment that means a lot of hybrids.”
Hybrid models including Toyota Motor Corp’s Camry and RAV4 and Honda Motor Co’s CR-V remained among the best-selling vehicles in the state during the quarter, but an EV – Tesla Inc’s Model Y – remained No. 1. In fact, the data suggests that EVs may be poised for a rebound, with overall market share up modestly from the first quarter.
Buying your first zero-emission vehicle is now even more affordable.
And now, 13 major automakers are supporting California’s immediate rebate of $3,500 for new models and $1,750 for used models.
We’re proving that reducing costs and growing American manufacturing go hand in hand. pic.twitter.com/au5mYUKxDv
– Governor Gavin Newsom (@CAGovernor) 17 July 2026
In an effort to drum up interest, Gov. Gavin Newsom last week announced a plan in partnership with 13 automakers to offer California residents instant rebates for purchasing or leasing their first zero-emission vehicle. The program seeks to claw back federal tax credits eliminated by President Donald Trump, with states offering a $3,500 rebate on new EVs or a $1,750 rebate on used models.
