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.
California’s new vehicle market opened 2026 with registrations declining 8.9% compared to the first quarter of 2025. The U.S. market fell 4.6% over the same period.
After rising 3.1% 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% in the first quarter of 2026, down from 21%for full-year 2025 and well below the 22% peak recorded in 2024. This is the lowest ZEV market share recorded since the fourth quarter of 2021. Total ZEV registrations declined 40.2% 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% in the first quarter of 2026.
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% 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% of all new vehicle registrations in the first quarter of 2026, up from 54% in all of 2025.
