Tesla’s Model Y continues to dominate California’s new vehicle market, holding onto its position as the state’s best-selling vehicle through the first nine months of 2026. However, Tesla’s overall registrations have declined even as the broader California auto market returned to growth in the third quarter.
According to the latest California Auto Outlook report from the California New Car Dealers Association (CNCDA), using data from Experian Automotive, Tesla recorded 121,822 registrations through September, down 10% from 135,293 during the same period last year.
Source: CNCDA / Experian Automotive
California has historically been one of Tesla’s strongest markets, with the Model Y regularly outperforming gasoline-powered competitors. Despite increased competition and changing EV incentives, the electric SUV continues to lead the state’s sales rankings.
Model Y maintains its lead as Tesla sales decline
The Model Y continued its trend of outselling even the most popular gas-powered cars, recording 86,099 registrations through September. Even though sales declined, this was still comfortably ahead of the Toyota Camry at 52,224 and Honda Civic at 42,238.
The Model Y also captured an impressive 57.9% of California’s luxury compact SUV segment.
The Model 3 added another 27,303 registrations, giving Tesla two of the state’s most popular electric vehicles.
January–September 2026. Source: CNCDA / Experian Automotive
However, Tesla’s third-quarter performance tells a different story. Registrations fell 15.4% year-over-year, from 52,005 to 43,994, while its quarterly market share dropped from 11.9% to 9.7%. That slide left Tesla third among California brands through September with a 9.3% share, down from 9.9% last year, behind Toyota and Honda.
The decline came as California’s overall new vehicle market grew 3.9% during the quarter, its first quarterly increase of 2026.
Meanwhile, zero-emission vehicle (ZEV) registrations fell 26.1% year-to-date to 215,467 units, with market share settling at 16.4%. In the third quarter alone, ZEV share eased to 17.3% from 17.9% in the second quarter. Hybrids continued gaining ground, reaching a record 22.8% share through September.
Despite the slowdown, California remains the country’s largest EV market, accounting for 28.9% of nationwide ZEV registrations.
California’s new MyFirstEV rebate program could help support demand in the fourth quarter. Whether that translates into stronger Tesla registrations remains to be seen, but the Model Y’s commanding lead shows it still remains a favourite among California buyers.
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