Toyota tightens grip on California’s new car market as Tesla’s EV lead shrinks

A new car report for California reveals a continued decline in Tesla registrations across the Golden State, whereas Toyota continues to gain ground—in what appears to be signs of a growing shift in consumer interest in America's largest car market.

First things first: The findings—drawn from the California New Car Dealers Association EOY 2024 Auto Outlook Report—cover all 2024 light vehicle registrations across the state, with one of the most telling revelations being the sales decline of Zero Emission Vehicle (ZEVs), most notably Tesla. 

• Tesla—the dominant EV brand in California—saw its sales drop for the fifth consecutive quarter, falling 7.8% in Q4 2024, with an overall 11.6% decline for the year (~203,000 registrations) 

• The EV automaker’s market share declined by 7.6 points in 2024, with the EV brand now holding 52.5% of the ZEV market and 11.6% of California’s overall new vehicle market share.

• ZEV market share for all brands dropped to 21.3% in Q4 across the state, down from 23.7% in Q3 2024, with California’s overall ZEV market share at 22% for the year.   

Amid the drop in the number of Zero Emission Vehicle registrations in California, hybrid powertrain vehicles gained 2.4% percentage points in Q4, making up for the 2.4% decline in ZEV registrations.  

Zooming in: Among all brands, Toyota’s market penetration continues to grow in California, solidifying the brand as the “king” of the Golden State in 2024.     

• Toyota had 289,258 registrations in 2024, a 4.4% increase from last year, holding 16.4% of California’s vehicle market share.

• Honda—which follows behind Tesla in state vehicle registrations 2024—finished the year with an 11% increase in registrations, totaling 192,166 vehicles.

• A total of five brands had an increase in registrations of 20% or more in the state, including Lincoln (27.6%), Land Rover (22%), Cadillac (21.7%), and Buick (21.7%).    

The total number of California’s new light vehicle registrations among all brands in 2024 was 1,759,141, only a -0.3% change from 2023. The state’s vehicle registrations in 2025 are projected to rise slightly to 1.8 million a year.  

Bottom line: California has long been a bellwether for EV adoption, and the decline in ZEV registrations—particularly Tesla’s continued slide—suggests shifting consumer preferences that could ripple beyond the state. The growing traction of hybrids and Toyota’s rising dominance point to a market still grappling with affordability. So—while EVs aren’t going away, their path to mass adoption may be more nuanced than once expected.

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