Tesla Model Y by far #1 bestseller in California. Cybertruck failed, Model S and X fell off list. Non-Tesla EVs soar to record.

By Wolf Richter for WOLF STREET.

The federal EV incentives finally expired at the end of September, which triggered a surge of last-minute EV-buying nationwide. In California, sales of new EVs spiked by 25% in Q3 from Q2, while sales of new ICE vehicles, including hybrids and plugin hybrids, plunged by 16% in the quarter, according to registrations data from the California New Car Dealer Association (CNCDA).

Tesla sales in Q3: +27% from prior quarter, after three quarters of sharp declines during which Californians, aggrieved by Elon himself, chose to buy something else. So still, year-over-year -9%, and -24% from the peak in Q2 2023 (blue). Maybe memories in California fade after three quarters?

Non-Tesla EV sales in Q3: +23% from prior quarter, +30% from a year ago, and +69% since Tesla’s peak in Q2 2023. They began outselling Tesla in Q4 2024 and unlike Tesla rose to a record in Q3 2025 (red).

EV sales in total, after years of fast growth,  entered stagnation over the past two years as Tesla, the big kahuna in the market, got crushed, while non-Tesla EVs had trouble filling the holes left behind by the big kahuna.

The share of EVs rose to a record 25% of total vehicle sales in Q3.

ICE vehicle sales have been in stagnation over the past few years, and on an annual basis have declined from the peak in 2017. In Q3, they got crushed, plunging by 16% from the prior quarter. ICE vehicles include hybrids and plugin hybrids – anything with an ICE in it.

So Q4 is going to be iffy. A lot of EV sales were moved forward into Q3 due to the expiration of the federal EV incentives. And the Q3 quarter-over-quarter spike is likely getting unceremoniously unwound in Q4 even as we speak.

But the expiration of the EV incentives doesn’t explain why ICE vehicle sales dropped so much in Q3 from Q2.

But then, ICE vehicle sales had surged in Q1 and Q2, while EV sales had lost ground due to Tesla’s skid, which had caused authorities on the subject matter to once again pronounce the umpteenth death of EVs. And in Q3, ICE vehicle sales unwound that surge in Q1 and Q2.

That said, year-over-year… ICE vehicle sales and EV sales both were up in Q3: ICE vehicle sales by 2.3%, and EV sales by 7.8% even though the big kahuna’s sales declined year-over-year by 9.4%. And total new vehicle sales were up by 3.6% year-over-year.

The Tesla Model Y is still the #1 bestseller of all vehicles in California, with over 35,000 registrations in Q3, and well ahead of the #2 Toyota RAV4 and #3 Toyota Camry.

But the Cybertruck is entering the list of expensive failed products. Sales in Q3 fell 40% year-over-year, to fewer than 2,000 trucks. And sales of the Model S and Model X have dropped so far that they have fallen off the list of CNCDA’s list of EV bestsellers.

So, Tesla has become a two-model automaker essentially, with the phenomenally successful Model Y and the fairly successful Model 3. The other three models – Cybertruck, Model S, and Model X – no longer matter in terms of unit sales.

Oh, the Robotaxis… Tesla’s autonomous driving system is way behind Waymo, which has been operating robotaxis for hire without safety driver for two years – though it doesn’t actually make the vehicles; they’re retrofitted Jaguars that were built for human drivers.

During its peak in 2023, Tesla’s market share in California was encroaching on Toyota’s market share. But Tesla has given up a lot of market share, and year-to-date it was surpassed by Honda and is now in the #3 spot with a share of just 9.8%.

Toyota is #1 with a share of 17.4%. Honda is #2 with a share of 10.9%. But Tesla is still ahead of all the others, led by Ford (share of 7.7%) and Chevrolet (share of 6.5%).

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WOLF STREET FEATURE: Daily Market Insights by Chris Vermeulen, Chief Investment Officer, TheTechnicalTraders.com.