California Leads the Charge in EV Sales Amid Market Challenges

California continues to dominate the electric vehicle (EV) landscape, with all-electric car sales in the first half of 2024 maintaining a remarkable level, roughly three times higher than the U.S. average of 7.5%. The Golden State was responsible for a third of all EV registrations nationwide, underscoring its pivotal role in the nation’s shift towards electric mobility.

The Tesla Model Y retained its position as the leading EV in California, but it’s facing increasing competition. Brands like Rivian and Hyundai are gaining traction in areas where Tesla has yet to make an impact. Notably, the Hyundai Ioniq 5 emerged as California’s third most popular EV, while the Rivian R1S became the top-selling large SUV, surpassing traditional options like the Lexus TX and Cadillac Escalade, based on the California New Car Dealers Association’s (CNCDA) data and estimates.

25% Plug-In Car Share—What Lies Ahead?

California’s plug-in electric car share remained relatively stable at approximately 25%, with EVs alone accounting for 22% in the first half of the year. However, the question remains whether this number will continue to grow amidst challenging market conditions, including high interest rates.

Sales of plug-in electric vehicles dipped in Q2 for the first time since 2020. New light vehicle registrations in California totaled an estimated 460,725 in the second quarter of 2024, down nearly 2% from the previous year. The first half of the year saw registrations at 892,363 units, a slight decline of 0.7% from the prior year.

In Q2 2024, 116,306 new plug-in cars were registered in California, a 1.3% decline year-over-year. Plug-in electric vehicles made up 25.2% of the total market, setting a new record albeit marginally. Battery electric vehicle (BEV) registrations stood at 101,443, down 1.3% year-over-year, making up a 22.0% market share—also a new record. Plug-in hybrid vehicle (PHEV) registrations decreased to 14,863 units, representing a 3.2% share, down 1.6% from the previous year.

Meanwhile, sales of non-rechargeable hybrids showed robust growth. In Q2, 62,038 new hybrids were registered, a 22% increase year-over-year, capturing nearly 13.5% of the market.

For the entire first half of the year, BEV registrations in California increased marginally by 0.5% to 191,322 units. PHEV registrations rose by nearly 4% to 30,542 units. Despite these marginal gains, there are concerns that continued market weakening could lead to a decline in plug-in car sales in 2024.

Comprehensive EV Market Overview for H1 2024

Plug-in electric car registrations in California in H1 2024:

• BEVs: 191,322 (up 0.5%) and 21.4% share
• PHEVs: 30,542 (up 3.8%) and 3.4% share
• Total plug-ins: 221,864 (up 0.9%) and 24.9% share
• HEVs: 118,222 (up 35%) and 13.2% share
• Total xEVs: 340,086 (up 10.6%) and 38.1% share

For context, California registered roughly 440,000 plug-in cars in 2023, a 45% increase from 2022, comprising 24.7% of the total market. BEV registrations alone reached approximately 380,000 units, equating to a 21% share of overall sales in California.

Leading EV Models and Market Dynamics

In H1 2024, the top all-electric models in California included:

• Tesla Model Y (69,810): #1 in Luxury Compact SUV (65.6% share)
• Tesla Model 3 (21,050): #1 in Near Luxury Cars (39.5% share)
• Hyundai Ioniq 5 (7,191): #5 in Compact SUV
• Tesla Model X (5,833): #2 in Luxury Mid-Size SUV
• Ford Mustang Mach-E (5,314): #3 in 2 Row Mid-Size SUV
• Rivian R1S (4,837): #1 in Luxury Large SUV (23.8% share)
• BMW i4 (4,060): #3 in Near Luxury Cars
• Chevrolet Bolt EV/Bolt EUV (3,960)
• Volkswagen ID.4 (3,909)
• Tesla Cybertruck (3,048)
• Toyota bZ4X (3,046)
• BMW iX (3,010): #5 in Luxury Mid-Size SUV
• Ford F-150 Lightning (2,999)
• Mercedes-Benz EQB (2,414): #2 in Luxury Subcompact SUV (17.3% share)
• Tesla Model S (2,363): #1 in Luxury and High-End Sports Cars (10.3% share)
• Audi Q4 e-tron (1,999): #3 in Luxury Subcompact SUV (14.3% share)
• BMW i5 (1,805): #2 in Luxury and High-End Sports Cars

Top plug-in hybrids included the Toyota RAV4 Prime (5,191) and Jeep Wrangler 4xe (4,614).

The Tesla Model Y stood out as California’s best-selling car overall, while the Tesla Model 3 fell short of the top five. The most popular models in H1 2024 were:

• Tesla Model Y – 69,810
• Toyota RAV4 – 36,160
• Toyota Camry – 29,012
• Honda Civic – 26,926
• Honda CR-V – 25,340
• Tesla Model 3 – 21,050

Tesla’s Market Share and Competition

In Q2, Tesla experienced a significant 24.1% year-over-year drop in registrations, totaling 52,211 units, with its market share decreasing to 11.3% from 14.6% the previous year. Despite this decline, Tesla retains a dominant 51% share of the EV market in Q2 2024. However, non-Tesla BEV registrations collectively reached 49,232 and could soon rival Tesla’s market share. Rivian’s R1S, for instance, offers a luxury large SUV segment where Tesla currently has no equivalent, highlighting the potential for competitors to further erode Tesla’s dominance.

According to CNCDA, Tesla held a 3.8% share of the U.S. market in H1 2024, with an estimated 295,000 units sold out of a total 7,758,241 units. This means that approximately 193,000 Teslas were registered outside of California.

Conclusion

While California remains a pivotal market for electric vehicles, the evolving landscape and emerging competition hint at potential shifts in market dynamics. Brands like Rivian and Hyundai are making significant inroads, while interest rates and other economic factors could impact future sales growth. Nonetheless, California’s commitment to EV adoption continues to set a benchmark for the rest of the country.

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William Kouch, Editor of Automotive.fyi