Last quarter, California recorded the highest-ever sales of eco-friendly vehicles. Among the 50 U.S. states, California leads with the highest proportion of eco-friendly vehicle sales. According to the California Energy Commission (CEC) on the 27th, EV and plug-in hybrid (PHEV) sales statewide in the third quarter of this year totaled approximately 124,700 units. This marks the highest quarterly sales since the state began tracking such data in 2008.Analysts attribute this to consumers rushing to buy vehicles before the federal tax credits, introduced under the Biden administration, expired at the end of September.

The benefits, up to $7,500, were a key driver in significantly boosting demand for EVs, which had struggled with price competitiveness due to expensive battery costs. In fact, eco-friendly vehicles accounted for 29% of new car sales in California in Q3, achieving the highest market share on record. In Santa Clara County, home to Silicon Valley's tech giants, nearly half (47%) of vehicle sales were eco-friendly, while Orange County (36%) and Los Angeles County (31%) also posted high shares.

California is regarded as the leading state among the 50 U.S. states in aggressive eco-friendly policies. It has implemented the world's strictest vehicle emission standards and renewable energy expansion measures, significantly influencing not only the U.S. but also the global automotive industry. California's policies on EV sales growth and charging infrastructure expansion have become benchmarks for other states.

However, experts predict that explosive growth in EV sales like before will be difficult to replicate. The Trump administration's large-scale budget cuts and deregulation policies are significantly unsettling market sentiment. Beyond the elimination of tax credits, federal privileges for EV drivers to use carpool lanes have also vanished. Additionally, California's regulation mandating 35% of new car sales to be zero-emission vehicles starting in 2026 faces jeopardy due to the federal government's reclamation of authority.

Brian Maas, president of the California New Car Dealers Association, diagnosed, "This sales boom is largely due to demand being pulled forward ahead of the tax credit expiration. EVs have now established themselves as a market pillar, but it's uncertain at what level sales will stabilize moving forward." The industry is accepting a slowdown in future eco-friendly vehicle sales as a given. Jesse Dosanjh, president of the California Automotive Retail Group, forecasted, "Consumers may turn to cheaper hybrids with longer ranges or traditional internal combustion engine vehicles instead of EVs for the time being." He added, "With leasing costs that saved over $200 per month due to tax credits now gone, it's inevitable to gauge the direction of demand.

The biggest variables are EV prices and economic conditions. EVs remain $5,000 to $10,000 more expensive than comparable internal combustion vehicles. The Trump administration's successive tariff impositions are inevitably raising vehicle prices, while economic slowdown and labor market uncertainty are suppressing consumer sentiment. In fact, overall EV sales this year are slightly behind last year's due to a sluggish first half. Moreover, various political controversies surrounding Tesla CEO Elon Musk are subtly influencing consumer purchasing decisions.

An industry insider emphasized, "The key going forward is whether EVs can maintain competitiveness on their own without tax benefits. For California's eco-friendly vehicle success story to continue, price stabilization, charging infrastructure expansion, and economic recovery must all support it simultaneously."