California Q2 Auto Sales Show EV Sales Stabilizing; New State Incentives Will Boost Further

July 23, 2026

Image Credit: California Governor’s Office (Gov. Newsom signing the state’s new ZEV incentive at the Rivian headquarters in Irvine, California)

Friend of EVs for All America, analyst Corey Cantor at ZETA (Zero Emissions Trade Association), shared on X yesterday good EV news from the California New Car Dealer’s Association. California is an EV leader, and what happens in the Golden State is a great sign of adoption trends nationwide.

Interesting to see that California's BEV share is almost back to 2Q 2025 levels this previous quarter (~18%) before the re-introduction of a state subsidy.

Suggests that California's EV market is stabilizing after the pull back of the federal credits. https://t.co/cBxx1ZBtsi
— Corey Cantor🌙 (@CoreyBCantor) July 21, 2026

Q2 results are in and EV sales have returned to a stable normal after a steep drop-off in 2025 when the federal EV $7,500 subsidy expired, with 18% of new car sales being fully electric despite economic headwinds and a broader affordability crisis affecting Americans and Californians in particular.

While the electric of new sales in Q2 2026 is not at federal incentive-period Q2 2025 levels, it’s a significant rebound from quarter 1 of this year when share had cratered to just 14%. The market is stabilizing thanks to a mixture of new compelling models and more aggressive pricing. EV armageddon did not come to pass, contrary to what you may have read in the news.

Similar to other markets like Germany, where the expiration of government credits led to a sales decline, the EV market proves its resilience—rebounding to normal levels and poised for growth as vehicles, buyers tastes, and charging infrastructure mature.

Prices at the pump and new models are sure to have helped, even absent a $7,500 incentive from Uncle Sam. Some other California-specific positive trends are likely to boost figures in future quarters and get EVs back on a solid growth trajectory.

With the recently-signed $3,500 ZEV incentive in California, some cash on the hood for buyers (coming from both the state and car manufacturers) is sure to sweeten the deal for many on the fence and boost sales. EV advocates in-state remain optimistic that increased charging availability will also fuel the next wave of EV adoption, as hybrid data suggests that many gas drivers today may be uncomfortable or unable to home charge.