California, often seen as the bellwether for automotive trends in the US, is witnessing an interesting shift in its new car market, particularly concerning electric vehicles and Tesla. According to the latest California Auto Outlook Report from the California New Car Dealers Association (CNCDA), while the overall new vehicle market remains stable, Tesla’s grip on the electric vehicle segment is showing signs of loosening.
CNCDA Year End 2024 CA Auto Outlook Report Cover
Tesla’s Market Share in California Experiences Fifth Quarterly Decline
For enthusiasts and industry watchers tracking New Car Tesla registrations, the report reveals a notable trend: Tesla has recorded its fifth consecutive quarterly decline in registrations in California. In the fourth quarter of 2024, Tesla registrations fell by 7.8 percent, contributing to a significant 11.6 percent drop throughout the entire year. This downturn has also impacted Tesla’s market share within the Zero Emission Vehicle (ZEV) sector. While still leading, Tesla’s ZEV market share decreased by 7.6 percentage points in 2024, settling at 52.5 percent. Looking at the broader California market across all vehicle types, Tesla’s share is now 11.6 percent, down from 13 percent the previous year.
California’s Auto Market Shows Overall Stability with Hybrids Gaining Ground
Despite Tesla’s challenges, the broader California new vehicle registration landscape remains largely stable. In 2024, a total of 1,759,141 light vehicles were registered in the state, representing a marginal decrease of just 0.3 percent compared to 2023. Looking ahead, projections for 2025 are optimistic, anticipating a slight increase to 1.80 million registrations. The fourth quarter of 2024 showed a positive uptick, with new vehicle registrations increasing by 4.8 percent compared to Q4 2023, suggesting potential momentum building into the new year. However, the report anticipates a relatively flat first quarter for 2025.
Shifting Consumer Preferences: Hybrids Rise as ZEV Market Share Dips
One of the most striking trends highlighted in the report is a shift in consumer preferences within the alternative powertrain sector. The overall ZEV market share in California experienced a dip to 21.3 percent in Q4 2024, down from 23.7 percent in the previous quarter. However, for the full year 2024, ZEVs accounted for 22 percent of the market, slightly up from 21.7 percent in 2023. Interestingly, registrations for all alternative powertrains collectively reached 40.2 percent for the year and 42.2 percent in Q4. The data indicates that hybrids are significantly contributing to the alternative powertrain segment, effectively offsetting the slight decline in ZEV market share. Hybrids gained 2.4 percentage points in Q4, mirroring the 2.4 point decrease seen in ZEV registrations. This trend suggests a potential shift in consumer behavior, with Californians possibly opting for a more gradual transition from traditional internal combustion engines (ICE) to fully electric vehicles, embracing hybrids as a stepping stone.
Brand Performance: Toyota Leads, While Others Show Significant Growth
Analyzing brand performance across all powertrains, Toyota remains the dominant player in California, registering 289,258 vehicles in 2024, a 4.4 percent increase from the previous year, capturing 16.4 percent of the state’s market share. Following Toyota, Tesla and Honda hold significant market shares, with Honda experiencing an impressive 11.5 percent increase in registrations in 2024, totaling 192,166 vehicles. Notably, several brands, including Lincoln, Land Rover, Cadillac, and Buick, demonstrated substantial registration growth of 20 percent or more in 2024, indicating dynamic shifts within the market.
Model Segment Highlights: Familiar Names Dominate
In terms of model segment bestsellers in California for 2024, familiar names continue to lead. The Toyota Camry topped the passenger car segment, while the Tesla Model 3 and Honda Civic closely followed. In the light truck segment, the Tesla Model Y emerged as the top seller with 128,923 registrations, followed by the Toyota RAV4 and Honda CR-V.
Regional Differences in Vehicle Preferences
The report also highlighted regional variations within California. Northern California saw a more pronounced decline in passenger car registrations (-12.6%) compared to Southern California (-10.3%), but experienced a smaller increase in light truck registrations (1.5% vs 5%). ZEV market share was slightly higher in Northern California (25.1%) compared to Southern California (22.7%).
Conclusion: A Dynamic California Auto Market
The California Auto Outlook Report paints a picture of a dynamic automotive market in California. While new car tesla registrations are currently experiencing a downturn, the overall market remains robust. The rise of hybrids and the subtle shift in ZEV market share indicate evolving consumer preferences and a potentially more nuanced path towards vehicle electrification. For car owners and those interested in the automotive sector, these trends suggest a market in transition, with diverse powertrain options gaining traction and manufacturers adapting to shifting consumer demands.
Data Source: Experian Automotive, California Auto Outlook Report by CNCDA
