The California New Car Dealers Association (CNCDA) released its Q2 2026 California Auto Outlook report, providing a first-half 2026 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 declined 7.7% through the first six months of 2026, with 864,848 new light vehicles registered compared with 936,543 during the same period in 2025. The U.S. market fell 2.8%. The rate of decline eased as the year progressed. Registrations fell 9.1% in the first quarter and 6.3% in the second.
Statewide registrations are projected to reach 1.73 million units for all of 2026, down 3.9 % from 2025. Elevated transaction prices, relatively high interest rates, and stagnant personal incomes continue to weigh on affordability, while pent-up demand from purchases delayed during the pandemic places a floor under the market.
Hybrid vehicles accounted for 22.1% of California’s new vehicle market through June, the highest share in the report’s data series and up from 19.5% for all of 2025. Hybrid share has now increased in each of the past four years. Quarterly share climbed from 20.9% in the first quarter to 23.2% in the second.
Hybrid registrations totaled 191,000 units in the first half of the year, and every one of those vehicles was sold through a franchised new car dealership. Franchised dealerships accounted for 75.7% of combined hybrid, ZEV, and plug-in hybrid registrations statewide.
Gas powered vehicles remained the largest single segment of the market at 57.6% of registrations, up from 54% in 2025.
Zero Emission Vehicles (ZEV) registrations declined 24.8% in the first half of 2026 compared with a year earlier, falling to 137,430 units. ZEV market share was 15.9% through June.
The quarterly trend points to a possible floor. ZEV share fell from 24.9% in the third quarter of 2025, before the federal tax credits expired, to 13.8% in the first quarter of 2026. It then recovered to 17.8% in the second quarter.
California continues to lead the nation on electric vehicle adoption by a wide margin. The state’s ZEV share of 15.9% was nearly three times the U.S. figure of 5.9 percent, and California accounted for 29.1% of all ZEV registrations nationwide.
Tesla registrations rose 11.8% in the second quarter to 45,953 units, though year-to-date registrations remain down 6.5%. Tesla accounted for 56.7% of California ZEV registrations through June, up from 45.6% a year earlier, as competing electric-only brands posted steeper declines.
