California, a trailblazer in environmental policy and electric vehicle (EV) adoption, is facing a critical juncture in its ambitious plan to phase out gasoline-powered cars. Recent data reveals a concerning trend: after years of rapid growth, EV sales in California have plateaued. This raises serious questions about whether the state can meet its groundbreaking mandate to ban the sale of new gas vehicles and achieve its climate and air quality targets.
New figures from the California Energy Commission indicate that 25.3% of all new cars registered in California in 2024 were zero-emission vehicles, a mere fraction above the 25% recorded in 2023. While this figure is a significant leap from 2020, where EVs accounted for only one in thirteen new car sales, the stagnation in growth over the past year is a cause for concern. California’s EV market share is now three times larger than it was just four years ago, but the current pace of expansion is insufficient to meet the state’s aggressive goals.
Under California’s mandate, approved in 2022, a significant 35% of new car models sold by automakers in 2026 must be zero-emission. This target escalates to 68% for 2030 models, culminating in a complete ban on the sale of new gasoline-powered cars in 2035. With 2026 models beginning to appear later this year, the state has considerable ground to cover to reach its near-term goals.
David Simpson, owner of multiple car dealerships in Orange County, highlights the slowing demand from a dealer’s perspective. He notes that while initial enthusiasm for certain EV models like the GMC Hummer EV was strong, it quickly dissipated. Sales of Chevrolet Equinox and Blazer EVs are moderate but not robust, suggesting a broader trend.
“The sales are declining,” Simpson stated. “We’ve filled that gap of people who want those cars — and now they have them — and we’re not seeing a big, huge demand. I don’t see households going 100% EV.” This sentiment underscores a potential shift in consumer behavior, moving beyond early EV adopters to a more hesitant mainstream market.
Dave Clegern, spokesperson for the California Air Resources Board (CARB), acknowledges the less dramatic growth in EV sales. However, he points out that this plateau coincides with an overall stagnation in the broader car market last year. While regulations dictate what automakers can offer, Californians are not obligated to purchase EVs. This reliance on consumer demand places considerable pressure on Governor Gavin Newsom, who has championed EVs as a central pillar of his climate and clean air agenda. Notably, a spokesperson for Newsom declined to comment on the situation.
Despite the challenges, Clegern emphasizes the built-in flexibility within the state mandate. The 35% target for 2026 is calculated as an average of each manufacturer’s total sales for model years 2022 through 2024. Furthermore, manufacturers can utilize a credit system, purchasing credits from companies like Tesla or Rivian that exceed the EV sales targets. Non-compliance, however, could result in substantial penalties of $20,000 per vehicle for manufacturers falling short of their quotas. “Manufacturers may still be in compliance even if they do not achieve these specific sales volumes,” Clegern clarified, indicating pathways to compliance beyond direct sales figures.
Brian Maas, president of the California New Car Dealers Association, suggests that automakers might opt to reduce the supply of gasoline-powered cars to California to avoid penalties. This strategy could lead to fewer choices for consumers, increased car prices, and potentially drive buyers to neighboring states with less stringent regulations, like Nevada or Arizona. Alternatively, consumers might choose to retain their older, more polluting vehicles for longer periods.
“We’re just not going to make the mandate as presently drafted,” Maas asserts, indicating a likely need for automaker adjustments. “The most rational is to constrain inventory.” This potential consequence raises concerns about unintended impacts on consumer access and affordability in the California car market.
The Alliance for Automotive Innovation has voiced similar concerns, publishing a memo titled “It’s gonna take a miracle: California and states with EV sales requirements” as early as December. The group cautions that the mandate could depress overall auto sales in California and other states adopting similar regulations. John Bozzella, the alliance’s chief executive, deemed California’s rules “by any measure not achievable” following President Trump’s executive order aimed at rolling back federal EV promotion policies. “There’s a saying in the auto business: You can’t get ahead of the customer,” Bozzella noted, highlighting the crucial role of consumer demand in driving market transitions.
While the Biden administration granted California a waiver in December, allowing the state to enforce its gas car phase-out, the future remains uncertain. Experts anticipate potential legal challenges to this waiver from the Trump administration. Furthermore, the potential elimination of the $7,500 federal tax credit for EV purchases under a Trump administration could further dampen consumer demand by increasing the upfront cost of EVs. Although Governor Newsom pledged to maintain state-level incentives, this commitment was made before recent budget constraints and natural disasters in California.
Despite the recent slowdown, California remains the national leader in EV adoption, with over 2 million EVs purchased. This number has doubled in approximately two years. However, EV sales growth specifically slowed to just 1.1% in 2024, with 378,910 units sold compared to 374,668 in 2023. Plug-in hybrid sales remained relatively stable, while hydrogen car sales experienced a dramatic collapse, plummeting from 3,119 in 2023 to a mere 600 in 2024. This overall sluggishness occurs against the backdrop of a slight dip in total California auto sales, reaching 1,752,030 vehicles last year.
Loren McDonald, chief analyst for the charging app Paren, attributes the slowing EV growth to a shift in consumer demographics. California’s EV market is expanding beyond the early adopters – typically affluent, environmentally conscious buyers willing to tolerate early challenges like limited charging infrastructure and higher initial costs. The market is now entering the mainstream, encountering buyers with different needs and priorities.
These mainstream consumers, often from middle-income households or residing in apartments without easy charging access, are less forgiving regarding EV shortcomings. Concerns about range anxiety, unreliable public chargers, and higher upfront costs become significant barriers to entry.
Tesla’s market dominance also plays a role. A segment of California consumers, particularly those with left-leaning political views who were previously loyal Tesla customers, appear to be distancing themselves from the brand due to CEO Elon Musk’s controversial public image and political affiliations. The 11% drop in Tesla sales in California last year has disproportionately impacted overall EV registration data due to the company’s substantial market share.
Affordability remains a major obstacle, although McDonald notes positive signs. Increased EV production is driving competitive pricing and attractive lease deals, with many options now available for under $400 per month. However, mainstream consumers often lack awareness of the long-term savings EVs offer in fuel and maintenance costs. Improved consumer education is crucial to bridge this gap, particularly as EV prices move closer to parity with gasoline-powered vehicles.
Looking ahead to 2025, McDonald remains optimistic. The EV market is poised to benefit from new, more affordable EV models priced below $50,000 and technological advancements, such as faster charging capabilities and vehicle-to-home power features. Overcoming the current plateau in EV sales growth will be critical for California to realize its ambitious climate and transportation electrification goals. Addressing consumer concerns, improving charging infrastructure, and effectively communicating the long-term benefits of EV ownership will be essential to reignite the rapid growth trajectory of the Ev California market.
