California’s zero-emission vehicle (ZEV) sales reached an all-time high in the third quarter, driven by a rush of buyers eager to secure federal tax credits before they expired.
According to the California Energy Commission (CEC), more than 124,700 ZEVs—including electric and plug-in hybrid models—were sold between July and September 2025, marking the highest quarterly total since the state began tracking data in 2008. These vehicles accounted for 29% of all new car sales statewide, the largest market share in 17 years.
The surge came ahead of the expiration of federal electric vehicle tax credits on Sept. 30, 2025, following President Donald Trump’s budget cuts. The program, launched under the Biden administration, offered up to $7,500 per purchase and had been a key incentive for buyers, offsetting the high costs of batteries made with rare-earth materials.
Regional data showed the San Francisco Bay Area leading the state in EV adoption. Santa Clara County recorded the nation’s highest ZEV or hybrid share at 47% of all new vehicle sales, followed by Orange County at 36% and Los Angeles County at 31%.
By brand, Tesla remained the dominant leader despite a 7% year-over-year sales decline. Hyundai ranked second, followed by Mercedes-Benz, BMW, Chevrolet, and Kia.
Brian Maas, president of the California New Car Dealers Association, said the surge had been widely anticipated. “Explosive third-quarter sales were expected before the tax credit expired,” he noted, adding that “much of the demand likely reflects purchases pulled forward from future quarters.”
Analysts now warn of a possible slowdown in EV sales following the removal of federal subsidies. The Trump administration also declined to renew nationwide carpool-lane access for EV drivers and revoked California’s authority to require that 35% of all new cars sold beginning in 2026 be zero-emission.
These policy changes have pushed the EV industry into a new phase—competing directly with gasoline vehicles without federal support. Although model choices and pricing have improved, ZEVs remain $5,000 to $10,000 more expensive than comparable gas-powered cars, raising concerns about the state’s clean transportation goals.
State officials are preparing to counteract the shift. Attorney General Rob Bonta has filed a lawsuit demanding that California regain its regulatory authority over zero-emission mandates, while agencies explore new incentive programs to sustain market momentum.
A CEC spokesperson said that despite regulatory uncertainty, demand for clean vehicles remains strong. “Even with federal policy rollbacks, California consumers continue to show confidence in electric vehicles,” the spokesperson said. “Automakers are unlikely to abandon the electric ecosystem they’ve built over the past decade.”
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
