(The Center Square) — Hybrid vehicles are gaining momentum in the California market, surpassing electric vehicles in the market share in the second quarter of this year.
California New Car Dealers Association released its Q2 2025 California Auto Outlook Report in July, analyzing new vehicle registration trends for the first half of the year. The report showed electric vehicle registrations are declining whereas hybrid vehicle registrations are increasing.
Electric vehicles experienced an 18.3% drop in registrations compared to the first half of 2024, according to a news release from the association.
Electric vehicle share in the state also fell to 18.2% this quarter, down from 20.8% in the last quarter. Electric vehicles had a lower share in both quarters compared to its 22% share in 2024.
Hybrid vehicles, on the other hand, were reported to take up 20.3% of the share in the state this quarter, an increase from 17.9% in the last quarter.
Hybrid vehicle registrations have also increased by 54% since the beginning of this year, now accounting for 19.2% of the year-to-date market share.
Electric vehicles still account for more than hybrid vehicles in the year-to-date market share with 19.5%.
California New Car Dealers Association told The Center Square that the decline in electric vehicle registrations can be due to state policies such as California’s Advanced Clean Cars II regulation.
This regulation required 100% of sales of new cars and light trucks to be electric vehicles by 2035 and was set to take effect in 2026. But Congress this year used the Congressional Review Act to invalidate the waiver that allows California to set more stringent emission standards that the federal government California sued the Trump administration for what state Attorney General Rob Bonta called the unlawful use of the review act.
To meet the 2035 ban, manufacturers would have to sell 35% of the sales market as electric vehicles, a difficult achievement given this quarter's numbers.
The state saw an increase in the overall vehicle registrations for the first half of the year, but inflation, tariffs and consumer caution are believed to affect the upward momentum the state has been seeing. The association told The Center Square it can’t give a prediction on how the sales will look like for electric, hybrid and other vehicles in the second half of the year, but it believes it is likely the state will see an impact in its sale of vehicles.
California New Car Dealers Association did not say whether hybrid vehicles are expected to continue passing electric vehicles in sales during the second half of 2025. But the organization said there are many factors that make electric vehicles the unfavorable choice for buyers and sellers.
One factor is price. Electric vehicles are commonly known to cost more than hybrids. For example, new Tesla models range from $42,490 to $89,990, according to carfax.com. That's compared to a 2026 Toyota Prius starting at $28,550, according to toyota.com.
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