California’s push to electrify its cars is facing a potentially serious problem: People aren’t buying electric cars fast enough.

Alejandro Lazo

CalMatters

After three straight years of strong growth, sales have stabilized in California, raising questions about whether the state will fail to meet its groundbreaking mandate banning sales of gas-powered vehicles.

About a quarter — 25.3% — of all new cars registered in California in 2024 were zero emissions, just slightly more than 25% in 2023, according to new California Energy Commission data. The flat sales follow several years of rapid growth — in 2020, only one in 13 cars sold was zero-emissions. Their share of California’s market is now three times larger than four years ago.

But the slowed pace of growth in the market puts the state’s climate and air pollution goals at risk. Under California’s mandate, approved in 2022, 35% of new 2026 car models sold by automakers must be zero emissions. That leaves considerable ground to make up as some 2026 models begin rolling out later this year.

The requirement ramps up to 68% for 2030 models, and in 2035, California’s rule bans all sales of gasoline-powered cars.

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Dealerships See Declining Demand for EVs

David Simpson, who owns three car dealerships in Orange County, said he is not seeing increased demand for electric cars. While the initial rollout of some models, such as the GMC Hummer EV, did well at first, the demand did not continue. Sales of the Chevrolet Equinox and Blazer EVs do alright, but aren’t strong, either, he said.

“The sales are declining,” Simpson said. “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.”

Dave Clegern, a spokesperson for the California Air Resources Board, which oversees the electric car mandates, said in an email that while sales of zero-emission vehicles in California are “less dramatic than in years past,” the flat sales occurred in the context of an overall plateauing of car sales last year.

Although the rules limit what automakers can sell, Californians are not required to buy electric cars. That means if consumer demand doesn’t increase, it could be a major black eye for Gov. Gavin Newsom, who has made electric cars a cornerstone of his agenda to fight climate change and clean the air. A spokesman for Newsom declined to comment.

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Flexibility in the Mandate and Potential Consequences

The state mandate, however, has some flexibility, Clegern said. First of all, it’s a multi-year formula: Each manufacturer’s sales of 2026 zero-emission vehicles must be 35% of its total sales averaged for model years 2022 through 2024.

Manufacturers also can buy credits from automakers that have exceeded the target — companies that only sell electric models, such as Tesla or Rivian. To enforce compliance with California’s sales requirements, state officials could impose steep penalties of $20,000 per vehicle on manufacturers that fall short of quotas.

“Manufacturers may still be in compliance even if they do not achieve these specific sales volumes,” Clegern said.

Brian Maas, president of the California New Car Dealers Association, said automakers could seek to avoid the fines by reducing the number of gas-powered cars they send to California dealers. He said that could leave fewer options for buyers, drive up prices and push some consumers to Nevada or Arizona to find the car they want, while others will hold on to their older, more polluting vehicles.

“We’re just not going to make the mandate as presently drafted” so automakers will have to take action, Maas said. “The most rational is to constrain inventory.”

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Industry Concerns and Political Challenges

The auto industry group Alliance for Automotive Innovation has been raising these concerns since at least December, when it published a memo entitled, “It’s gonna take a miracle: California and states with EV sales requirements.” The group warns the mandate could depress auto sales in California — as well as in other states that adopt its rules.

Last month, John Bozzella, the group’s chief executive, called California’s rules “by any measure not achievable” after President Donald Trump signed an executive order repealing federal rules promoting electric vehicles.

“There’s a saying in the auto business: You can’t get ahead of the customer,” Bozzella said.

The outgoing Biden administration’s U.S. Environmental Protection Agency granted California a waiver in December that allows the state to enforce its requirements phasing out new gas-powered cars. Many experts believe the Trump administration is likely to challenge the waiver through the courts.

Experts also anticipate that Trump could eliminate the $7,500 federal tax credit for zero-emission vehicle purchases, which would increase the cost of buying some electric cars. Newsom vowed last year to continue offering the incentive through state funding, although that promise came before Los Angeles faced devastating wildfires and the state released its fragile budget earlier this year.

EV Sales Trends and Consumer Challenges

Californians have purchased more than 2 million electric cars, leading the nation. The number has doubled in about two years.

But electric vehicle sales, which make up the majority of zero emission cars, grew by only 1.1% in 2024, with 378,910 sold compared to 374,668 in 2023. Plug-in hybrids, once considered a potential alternative to a purely electric model, remained relatively stable. And sales of hydrogen-powered cars all but collapsed last year, with sales plummeting to a meager 600 in 2024 from 3,119 in 2023.

The slower growth comes amid overall market sluggishness, with all auto sales in California dipping slightly last year to 1,752,030.

Loren McDonald, chief analyst for the charging app Paren, said a major contributor is a shift in consumer demographics.

The state’s market has moved beyond early electric car adopters — affluent, environmentally motivated buyers willing to overlook challenges like limited charging infrastructure and higher costs — and into the mainstream.

He said these new buyers, often from middle-income households or who live in apartment buildings without easy access to charging, are far less forgiving when it comes to electric cars. Concerns about range, broken chargers and upfront costs are deal breakers.

Tesla’s market dominance has exacerbated the issue. Many left-leaning California consumers, who were once loyal to Tesla, appear to have distanced themselves because of CEO Elon Musk’s controversial public persona and alliance with Trump.

As Tesla sales have softened, dropping 11% in California last year, the decline has disproportionately affected overall EV registration data in California because of the company’s significant market share, McDonald said.

Affordability remains a crucial hurdle, though McDonald sees signs of improvement. Automakers have ramped up production, leading to competitive pricing and aggressive lease deals—many under $400 per month.

But mainstream consumers are largely unaware that electric vehicles offer long-term savings in fuel and maintenance, McDonald said, adding that better education is needed to convince consumers to take the leap, especially as electric car prices increasingly approach parity with gas-powered vehicles.

McDonald remains optimistic about 2025. The market will benefit from new electric models priced under $50,000 and technological advancements, such as faster charging and vehicle-to-home power capabilities.

About the Author

Alejandro Lazo writes about the impacts of climate change and air pollution and California’s policies to tackle them. He’s written about the state’s groundbreaking electric vehicle mandate, the oil industry’s efforts at capturing carbon from fossil fuels, and how California’s climate programs have created a robust cow poop industry.

About CalMatters

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