California drivers are switching to electric vehicles at a faster rate than the rest of the nation, capturing nearly 22 percent of the state’s new vehicle market in the first nine months of 2023, according to a new report by the California New Car Dealers Association.
The state outpaced the rest of the nation in new electric vehicle (EV) registrations in the third quarter of 2023—which includes sales in July, August, and September—and were one full percentage point better than the national average, which only yielded a 13.3 percent improvement over 2022.
In all, new registrations of all vehicles reached nearly 1.4 million in the first nine months of this year, compared to 1.2 million during the same time period in 2022.
A smaller percentage of buyers this year opted to purchase a traditional vehicle with an internal-combustion engine, according to the association. Sales of traditional vehicles dropped from about 72 percent in 2022 to 65 percent this year.
However, electric-vehicle and hybrid-car purchases increased to 35 percent of all sales in the first nine months of 2023, compared to about 12 percent in 2018.
California leads the rest of the country in new electric-vehicle registrations, comprising about one-third of all state vehicle sales.
Tesla trounced other EV competitors, representing nearly 63 percent of all new electric vehicle registrations in the state by September. Its Model Y was the top choice for new luxury compact sports utility vehicle buyers, representing 106,000 new registrations in the state. And its Model 3, which captured nearly 67,000 new registrations, was the most popular selling passenger car in the state.
New car registrations grew by 14 percent overall during the first nine months of 2023, compared to the first nine months of 2022, according to the Nov. 1 report.
Overall, Toyota was the top-selling brand for all vehicles with a 15-percent market share, followed by Tesla, which captured nearly 14 percent. Honda came in third with 10-percent market share, followed by Ford (8 percent), Chevrolet (7 percent) and Kia (5 percent).
“Meeting our customers’ needs, whether it’s continued demand for [internal-combustion vehicles], hybrids, or new EV options, is our top priority, and we are looking to expand our vehicle offerings,” said Tony Toohey, the car association’s chairman and owner of Auburn Toyota, northeast of Sacramento. “As a local new car dealer, we want to offer our customers and community the variety of vehicle options they want at price points that meet their individual circumstances.”
California will end the year with 1.8 million new vehicle registrations, and is predicted to reach 1.88 million more in 2024, the association reported.
“Pent-up demand remains high since the pandemic and is estimated to continue to support new vehicle sales for years to come,” the association, which represents nearly 1,300 franchised new car and truck dealers throughout the state, wrote in a press release Wednesday.
High interest rates, however, are making cars less affordable as household savings accounts are drained, according to the association.
The potential effects of the United Auto Workers strike, which ended Oct. 25 when the union announced a tentative deal with Ford, could also be a major factor in impending new vehicle sales.
