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Q1: Hybrids 20.9%, EVs 13.7%…Toyota takes 1st with 79,250 units
Tesla's market share drops to 7% range…Slowing growth of EVs in the US officially begins
In California, one of the largest automobile markets in the United States, Japan's Toyota, promoting hybrid electric vehicles (HEVs), has surpassed American electric vehicle (EV) maker Tesla to secure the top spot in sales for the first quarter of this year.
The fact that Toyota outperformed Tesla and hybrids surpassed EVs in California, which has the fastest pace of electrification transition in the US, suggests that the EV market in the US is significantly contracting.
According to the California New Car Dealers Association (CNCDA) on the 17th, new car registrations in California in the first quarter of this year totaled 416,810 units, an 8.9% decrease compared to the same period last year.
Considering that the overall US new car market decreased by 4.6% during the same period, California's contraction was relatively larger. High interest rates, high vehicle prices, tariff uncertainties, and weakened consumer sentiment are cited as reasons.
In sales by fuel type, hybrid vehicles significantly outperformed electric vehicles.
In the first quarter of this year, hybrid vehicle registrations in California exceeded 87,000 units, with a market share reaching 20.9%.
In contrast, the market share of zero-emission vehicles (ZEVs), including electric vehicles and hydrogen fuel cell vehicles, fell to 13.7%, marking the lowest level since Q4 2021.
The success of hybrid vehicles and the slump in electric vehicles also created a stark contrast between Toyota and Tesla. Toyota is considered to have the greatest competitiveness in hybrid vehicles among global brands.
During the same period in California, Toyota registered 79,250 units, a 3.5% increase compared to the same period last year. Its market share also rose from 16.7% to 19.0%, securing the top sales position.
On the other hand, Tesla's sales decreased by 24.3% from 42,211 units to 31,958 units during the same period, and its market share also dropped from 9.2% to 7.7%.
While Toyota has been criticized for being more conservative than Tesla in its pace of electrification transition, this trend is now acting as a strength.
According to S&P Global Mobility, the proportion of hybrid vehicle registrations in the US expanded from 3.1% in Q2 2020 to 16.3% in Q2 2025.
Local industry officials in the US cited the end of federal EV tax credits as the biggest reason for the slowdown in EV demand, leading to changes in the California automotive market. High interest rates, vehicle price burden, slowing EV demand, aging models, and intensifying competition were also mentioned as reasons.
Regarding Tesla's sluggish performance, it is analyzed that this is not a temporary phenomenon due to the abolition of US EV subsidies, but rather an adjustment in the US automotive market trend, which had been solely focused on EVs.
An automotive industry official said, "It is ironic that Toyota, which had been criticized for being slow in its electrification transition, is now increasing its market share in the US by promoting hybrid vehicles."
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