Data in the latest report from California New Car Dealers Association (CNCDA) again suggests that zero emission vehicle (ZEV) sales have reached a current saturation point. As defined by the current CARB regulations, total ZEV sales (PEV—plug-in electric vehicles) dipped to 24.5% of all new light duty vehicle registrations, the lowest level since 2023:Q1. Battery hybrids (HEV) in contrast edged up to their highest level at 17.9%.

The latest results come even though total LDV registrations were up in the quarter, likely as the result of buyers seeking to stay ahead of the pending tariff actions. Total registrations rose 8.3% compared to 2024:Q1, with virtually all growth coming from light trucks.

Californians are buying alternative powertrain vehicles, just not the type that the regulations are attempting to force them to buy. Instead, the market is turning more to hybrids, both HEVs and PHEVs (plug-in hybrids) that achieve both fuel cost savings along with substantial emission reductions. State regulations, however, remain focused on attempting to force the perfect while consumers instead are choosing to buy the good.

This conclusion is even stronger when looking at the more complete results. Lumping the ICE (internal combustion engine) component allowed under the state’s regulations—plug-in hybrids (PHEVs)—total hybrid sales in the 1st quarter surpassed sales of the true electric vehicle offerings (battery electric vehicles—BEVs).

As Californians have shifted their buying patterns, progress towards the governor’s 2026 electric vehicle mandate has fallen further behind and prospects for the 2030 and 2035 mandates are becoming even less assured. Using 2023:Q1 as the starting base, PEV sales in 2025:Q1 would have had to be 28,000 higher to stay on track.

The ZEV slowdown is not limited to California. National data from Argonne National Laboratory shows PEV sales in 2025:Q1 dropped 12.0% from the previous quarter. PEV market share consequently fell to 9.7% from the previous 10.3%.

Electric vehicle sales stalled as the price gap once again began to rise. After remaining at a relatively stable $7,600 difference over several quarters, the price gap rose to $11,700 in the latest March results from Kelly Blue Book. The smaller and lower cost vehicle classes we track in contrast remained stable or declined.

Rather than legislative approval or actions by the voters, the current effort to revamp what vehicles Californians are allowed to buy is based on Executive Order N-79-20 which set a new goal calling for all new vehicles offered for sale in the state to be zero emission vehicles (ZEVs) by 2035 for light duty cars and trucks, and by 2045 for heavy and medium duty vehicles. The governor’s order was subsequently implemented through CARB’s Advanced Clear Cars II regulations, and the required federal waiver was issued in the waning days of the Biden Administration. US EPA submitted that waiver action for consideration under the Congressional Review Act. 

Pronouncements on the program and its previous progress generally refer to “zero emission vehicles” as stated in the executive order. The term, however, is misleading. As defined by CARB, “zero emission vehicles” include those with zero tailpipe emissions (BEVs) along with combustion vehicles with a battery component (PHEVs). Under CARB regulations, this combustion component can still make up to 20% of allowable sales in 2035, although what qualifies as a PHEV becomes stricter over time. All PEVs also have higher production-related GHG emissions, and operational emissions depend on the generation mix in the grid which in California varies widely by time of day.

Considering these factors, vehicles being mandated under the CARB rules are more appropriately considered lower emission rather than truly zero emission. Removing the bureaucratic obfuscation that defines the combustion PHEVs as “zero emission,” our tracking of progress under the Executive Order consequently has focused on the more zero component of the “zero emission” eligible family. In 2025:Q1, ZEVs as defined in the regulations averaged 24.5% of all LDV sales. The more truly zero BEVs were at 20.8%, as shown in the following charts. Hydrogen (primarily fuel cell) vehicles are also eligible to be classified as ZEVs, but only 600 were sold in the state in 2024.

Tesla, in spite of progressive concerns over its CEO’s role in the federal government, still largely defines the ZEV market at 43.9% of California ZEV sales in the 1st Quarter. Tesla sales, however, were off 15.1% compared to 2024:Q1, the prime factor in low ZEV performance in the most recent data. There are few contenders to replace Tesla’s importance to the success of the governor’s mandate. Using the most recent Energy Commission data, second place Hyundai pegged in at only 5.4% of total ZEV sales in 2024.

As detailed in our previous report, the Tesla factor has much broader implications to the outcome of the governor’s sales mandate than just market share. Tesla’s products are full, zero tailpipe emission ZEVs and not the combustion engine PHEVs used to improve the program’s bureaucratic accounting. Tesla is the primary supplier of emission credits to other producers, both to meet the federal CAFÉ fuel efficiency standards and for the ZEV regulations adopted by California and other states. If Tesla does not sell the cars that produce the credits, the current regulatory structure starts to fall apart. Tesla’s supercharger network is currently the primary support structure that reliably serves public charging needs. Finally, current insurance costs for electric vehicles are higher and eat into the presumed operational cost savings, while current vandalism of Tesla vehicles threatens to send these costs higher still.