Reading the latest headlines on EVs, you might think the industry had a terrible 2024 and not one of the highest on record. In California, where Tesla’s sales declined over the last two quarters, multiple sources have pointed to stagnating EV growth rates as a sign of existential declines (calmatters.org, latimes.com). For the second year in a row, electric vehicle sales made up 25% of new car purchases in the state — one in four — falling short of California’s ambitious goal of 35% by 2026. With no growth over the past year, the odds of hitting that target within a year are slim. Missed goals, stalled momentum, and declines — especially in what’s considered the EV capital of the US — are enough to raise the very valid question: is the California EV dream dying?
Reports Of Death Greatly Exaggerated
Turns out, not exactly. It is of course true that in 2024 EV growth slowed. However, year over year growth, while helpful, isn’t the best predictor of where the market is going. Some of the slowdown is expected, and aligns with typical market dynamics, where rapid initial growth stabilizes as the market matures. According to data from the California Energy Commission (energy.ca.gov), despite a slowing percentage growth rate, the number of California electric vehicle sales continued to increase, reflecting expansion. Double and triple digit growth rates would obviously be objectively better for EVs, but also very difficult to sustain for technology like vehicles which follow a slower and complex path to adoption versus say, a cell phone (we see the iPhone / EV example used a lot…). At about 2M vehicles, EVs make up almost 7% of the 30M motor vehicle parc in California. That’s actually not bad for a very expensive purchase that really only went mainstream within the last 2 years.
But more importantly, let’s double click into California’s goal of 35% of new car sales being EV by next year. At 25% today, CA is a ways away and the goal seems overly ambitious. However, on closer inspection, it turns out that several counties across the state haven’t only already achieved the 35% goal, they’ve crossed it. So while 35% may have been ambitious, it’s not as far off as it appears.
California Electric Vehicle Sales Across Counties
Let’s break this down. Across counties, we can get a clearer picture of how the EV story is unfolding and what might come next. How some counties have performed isn’t just a sign for how we can expect the rest of the state to play out, but it’s also a sign for other states, particularly those that are in the stage that California was 2-3 years ago.
Most of California’s EVs Reside in Los Angeles
Source: California Energy Commission, Axle Mobility
Several Counties Have Cruised Past 35% of EVs as % of New Car Sales
California counties total registered vehicles by FY 2024 EV penetration of sales
Source: California Energy Commission, Alliance for Automotive Innovation, Axle Mobility
What is California’s most significant EV market? Well, it depends on the perspective. At first glance, Los Angeles appears to be the epicenter, with nearly one-third of the state’s EVs on the road, sitting for hours in LA’s monstrous traffic and hurtling onto the worlds shortest onramp on the 110 (if you know, you know…). As the most populous county in California, home to 9.1 million people, LA is famous for its entrenched car culture (worldpopulationreview.com). It is also the county that consistently purchases the highest number of new vehicles every year. However, while LA leads in overall numbers, EVs accounted for a bit more than 25% of total new car sales in the city in 2024 — roughly in line with the state average. Great, but nothing special.
On the other hand, there are some surprising shifts happening elsewhere in the state. Moving northward, the Bay Area has outpaced LA in terms of EV market share. As California’s technological heart, the Bay Area has long been a leader in innovation, and that trend is evident when it comes to the adoption of EVs. Five counties in Northern California surpassed 30% of new car sales being electric in 2024. Some counties are close to 1 in every two new cars being electric. Santa Clara County — home to Silicon Valley — leads the charge at 43% of new car sales being electric vehicles. Marin County follows close behind at 40%, while Alameda County is at 38%. These counties highlight that the 35% by 2026 goal, while certainly ambitious, wasn’t as far-fetched as it seems: it’s already been achieved across some of the most populated counties in California (Alliance for Automotive Innovation).
That said, we’re a tough crowd. While impressive, it’s ultimately not surprising that the tech center of the world has been quicker to adopt new technology. It’s more telling that beyond Silicon Valley, places like Orange County, with a population of 3.1 million, aren’t that far behind. On the heels of a slower start, EVs now account for over 30% of all new car sales in California’s beach cities and beyond. Another intriguing location is Sacramento. Quietly emerging as a strong player in the EV market, EVs now make up 28% of new car sales in the county in 2024. The surge in Sacramento has been one of the highest in the past two years, signaling that Sacramento’s electric vehicle market is rapidly catching up and likely to continue to see state-leading adoption.
On the flip side, rural regions are still seeing slower adoption, a trend that mirrors the national story of EV adoption. However, even in these areas, the shift towards electric vehicles is gaining momentum. Counties like Napa, Sonoma, Placer, and Kern are showing notable growth in EV market share. Placer County, home to Lake Tahoe and steeped in Gold Rush history, saw EVs make up 28% of new car sales in 2024, while Kern, which includes Bakersfield and much of California’s agricultural heartland, reached 12%. These counties may not be top-of-mind when one thinks of EVs, but they are beginning to follow and we can see the tipping point emerge on the horizon.
This shift from coastal cities to inland and rural regions underscores how California’s EV market is growing. What once seemed like a trend confined to urban hubs is now becoming a statewide way of life, with areas of all types — urban, suburban, and rural — embracing EVs, albeit at different paces – as JB Hunt famously calls it, “the speed of right.” This diverse adoption signals that the Golden State’s electric vehicle revolution is far from one-dimensional, and its significance stretches across the entire state.
What 25% Means
By the way, throughout this article, we’ve talked about 25% as if it’s a small, almost trivial percentage in the grand scheme of things, especially when compared to the ambitious 35% goal. But here’s the thing—EVs making up even 25% of new car sales is actually a milestone in itself. To put this in perspective, let’s look at Geoffrey Moore’s “Chasm” theory (contrary to popular belief, not the same Moore behind Moore’s Law). In his framework for technology adoption, Moore suggests that new technologies have to cross a critical “chasm” as they move from early adopters to the mainstream market. The tipping point is typically around 15% of the market share, where a technology begins to go beyond the niche early users and into the broader, more conservative consumer base. Most products don’t cross this 15% threshold as they are rejected by the mainstream.
People, particularly in California, may have a slightly more complicated relationship with Tesla today, but give Tesla their flowers. California crossed the 15% threshold in 2022, almost entirely in part to the 2018 launch of the Tesla Model 3, which was a more affordable and accessible option for buyers (greentechmedia.com). Just four years later, we are now in a dramatically different landscape. In 2023, and especially in 2024, things have evolved: EV range has dramatically improved, vehicle prices have dropped (hello $250 leases!), and every major automaker is now in the race (albeit with some struggling more than others.) More models are entering the market, catering to various price points, styles, and consumer preferences.
We’re at a stage where consumer confidence is rising, but it’s still a process. The next wave of anchor EVs — vehicles that will define the category for the next few years — still need time to solidify their place in the mainstream. Will it be the Ford Mach-E? Will it be the Honda Prologue? Will it be the Ioniq 5? The buyers at this point are savvy, practical, and looking for reliability and value. They are not interested in climate, or tech for the sake of it — they just want cars they like, that fit their needs and work for their lives and wallets — and these buyers are increasingly willing to choose EVs if they meet those standards.
But here’s the key: once a technology crosses the “chasm” and hits the mainstream, there’s no turning back. Sure, it might slow down a bit or face some hurdles, but there’s no way to roll back the clock. The technology is in motion now, and it’s becoming more or less inevitable. We’re truly in an era where EVs are no longer just for the early adopters; they’re for anyone looking for a good car that works well, is affordable, and fits into their lifestyle.
Conclusion
So where does this leave us with respect to the future of EV growth in California and beyond? Is it extremely bad news for EV enthusiasts that California will not hit the 35% goal around new car sales? Not really. It’s undeniable that there is a slow down, but California is very much trending to become a state with majority EV sales in well under a decade. As consumers and tech optimists, we’re excited to see what drives this next phase of adoption and we expect it includes: improved cost, better technology, and a much better user experience.