Pent-up demand remains high since the pandemic but several factors could hobble the state’s news vehicle sales moving forward
Sacramento, Calif.—The third quarter 2023 Auto Outlook report, published Wednesday by the California New Car Dealers Association (CNCDA), reveals a 14.3 percent increase in California’s new vehicle registrations compared to the first nine months of 2022.
Forecasts from the Auto Outlook report show that California will end the year at 1.8 million new vehicle registrations and is predicted to reach 1.88 million in 2024. CNCDA’s historical Auto Outlook data is sourced from Experian Automotive.
Pent-up demand remains high since the pandemic and is estimated to continue to support new vehicle sales for years to come. However, high interest rates leading to weakening affordability, depleted pandemic-built household savings, and the potential UAW strike after effects will be major factors in impeding the state’s new vehicle sales. That said, California’s Q3 2023 new car registration numbers are a full percentage point better than the national results, which yielded only a 13.3 percent improvement vs 2022.
A promising sign: The pace of new car sales showed a significant acceleration in Q3 with an increase of 21.1 percent YOY, versus last year’s Q3 numbers which showed a decline of 14.1 percent.
Key figures from the report: The state’s BEV market share increased to 21.5 percent during the first nine months of 2023. California’s total new BEV market share sales increased by half a percent from the first six months of this year.
While ICE-powered vehicles account for 64.6 percent of the state’s new vehicle sales share, sales were down from 71.6 percent in 2022. Sales of BEVs, PHEVs, hybrids, and fuel cell sales in the state accounted for a 35.4 percent share YTD (as compared with 11.6 percent in 2018).
Hybrids and Electric Vehicles
California leads the way in the shift toward new auto technologies, leading BEV registrations nationwide, with almost 35 percent of all sales. The report also shows a 103 percent increase in BEV vehicle sales this year from franchised dealers. Direct-to-consumer sellers (i.e., Tesla, etc.) showed a 42 percent increase in sales YOY.
California’s BEV market share remains at just over 21 percent in the first nine months of 2023. This is a significant difference from the nation’s BEV market share, which reaches only 7.4 percent of sales, YTD.
The Q3 report lists California’s top-performing BEV and PHEV makes and models. The top three selling BEV and PHEV models: Tesla Model Y, Tesla Model 3, and the Chevy Bolt. Fourth place was captured by the Jeep Wrangler (the best-selling PHEV on the list).
While Tesla continues to be the BEV market share leader in California, new numbers show their lead diminishing as traditional automakers roll out new electric vehicle models. Tesla showed a significant decline in sales at an 8.9 percent loss in share (when comparing YTD ’22 to ’23 numbers). Mercedes-Benz and BMW show the highest increases of BEV sales in California, picking up 2.6 and 2.5 percent of the share, respectively.
The Q3 market share leaders for exclusively PHEV makes were Jeep (capturing 29.8 percent), Toyota (at 17.6 percent) followed by BMW (at 12.8 percent).
So far this year, Northern Californians remain the larger adopters of BEVs, capturing 25.7 percent of the market share, while Southern CA BEV sales reported 21.1 percent of registrations.
Model Segment Rankings
California’s best-selling models for the first nine months in the primary segments remain the same as last quarter (and have increased/decreased their individual segment share by the following percents): Honda Civic (-.2), Toyota Camry (-.5), Tesla Model 3 (+2.4), Toyota Tacoma (-1.5), Ford F-Series (+.2), Toyota RAV4 (+.4), Toyota Highlander (-1.2), and the Tesla Model Y (-1.4).
Brand Market Share and Summary
Toyota remains California’s market share leader, holding 15 percent amongst all vehicle brands, followed by Tesla at 13.5 percent, Honda at 9.5 percent, Ford at 7.8 percent, and Chevrolet at 6.8 percent. Registration numbers increased by over 20 percent for Rivian, Buick, Tesla, Honda, Audi, Acura, Volvo, Chevrolet, Cadillac, Hyundai, Genesis, and Land Rover.
The state’s registration numbers do not mirror the rest of the U.S., which reports Toyota and Ford as the top-selling brands at 12.2 and 12 percent (respectively), followed closely by Chevrolet at 11.3 percent.
Brands showing the most significant positive change in registration numbers for Q3 ’23 compared to Q3 ’22 were: Rivian (176.8 percent), Buick (44.6 percent), Tesla (38.5 percent, and Honda (34.7 percent). Brands underperforming from last year: Dodge (-24.6 percent), Ram (- 15.8 percent), and Jeep (-6.7 percent).
Market Share Trends by Segment
SUV sales account for 53 percent of the California market in the first nine months of 2023, with non-luxury vehicles holding the majority share at 34 percent. This segment lost a point when compared to YTD 2022 numbers, while Luxury SUVs gained two points from last year at this time.