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 vehicles with internal combustion engines (ICE), 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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Tesla cars will diminish quickly as hybrid and gas return. Hybrid is the best option available. Gas/Diesel trucks are still the best option for many reasons. Now, I drive two hybrids and if I need a truck to work on my ranch I rent Home Depot truck and can rent it for 75 minutes at about 25$ plus gas. In other words, this is the cheapest truck I have ever owned.
I admire Elon and think cars are his least valuable effort. Screw the cars, get on with power generation, Starlink (which is the best ever), and all things space.
I drive by the auto center and watch what is happening. Turgid inventory changes all the time. Toyota hybrid is the best of all…. miles and miles of cheap travel and low cost maintenance.
This is not “rocket science” when looking at Tesla. Just like the new AI put out by Sam Altman (it is free and called ACE with AI assistant Nova) to compete with google. Google is toast if you can get this experience without ads being rained on you every second.
Wolf is savvy beyond most. Still, things are changing so fast it is hard to see how the little guy can do much to compete with AI. The main thing to do is learn how to use like this:
I have had Farmer’s Insurance over 40 years, no claims on my home and they still jacked up my homeowners. When you search for home fire insurance on some platforms if you click the link to your existing insurance in asking for a competitive offer and send it in Farmers got this and did not say so BUT, got my new Fire insurance and it was exactly the same as last year. A variation of this works on Amazon if you understand that Amazon follows you when you search….
AI will put most of us at clear disadvantage that will make it so you will have to choose among the performance metrics of large investment firms.
Space? Do you really think the internet is coming from satalites in space? Man, the general public is even more retarded than I suspected.
If you have Starlink, it does. And in rural areas, it may be the only broadband service available.
How is Starlink even a business model? The satalites have to be replaced every 5 years and most economic activity that needs internet is already wired or in range of a cell phone. Good for people who like to sail ocean yachts i guess.
Kurt – I travel for 6 months out of the year and just got around to mounting a Starlink dish on the roof of my van. Lightning fast internet on the highway and everywhere else unless I’m parked under larger mature trees. I mounted it flat on the roof so that it is not visible to the public.
Performance is unparalleled which is why they are becoming a must have for so many travelers. You also have Wifi calling on your cell phone to stay in touch with family and friends or for emergencies.
If you travel at all, you’ll see them increasingly mounted on residential homes since there are no other alternatives for many Americans.
Re: “Google is toast if you can get this experience without ads being rained on you every second.”
As “AI” revenue comes nowhere near covering its costs, you can be sure it will soon be raining ads on you, and results of your queries will be determined by how much advertisers have paid for placement. It’s already begun.
Responses to AI query prompts that reveal some possible interest in buying something will be even less trustworthy than today. And will lead to inundation of your email and FaceBook feed with sales pitches.
We have been on a technical plateau with batteries for a couple of years. However in 2026/2027 we should start to see some visible improvement.
ICE still works best for me, living in cold northern climate with 100 miles between towns and little charging infrastructure. However my next vehicle will be a Tesla assuming the continue to rev their product line.
It’s not just the EV component it’s the idea of Autos as software platforms. With Tesla and Chinese equivalents, the entire platform is integrated into a single software platform which means many normal maintenance and or recall issues can be fixed by over-the-air software fixes. This requires a different level of engineering than legacy makers are willing to follow and also a different level of vertical integration as every component must not only be mechanically compatible but compatible at a software level.
I do agree with the observation that EV pickups if they are working trucks are still inferior to gas/diesel
When initially released, there was no doubt the Model Y and Model 3 were ahead of the game. However, as a vehicle they are now more or less average. What gives Tesla a significant advantage is their supercharger network. That and the fact that many of the traditional automakers are making their electric vehicles with eccentric designs. More vehicles like the BMW i4, which resembles a traditional car, along with native NACS/supercharger support will bring strong competition to Tesla.
Just when I thought I was out…they pulled me back in.
Got out yesterday, gonna short this monstrosity again, at latest before Q4 earnings go public..
Alas, many people have lost money trying to short the TSLA hopium stock. It is a crazy market right now..
I made the mistake of listening to Elon blabbering on the Q3 call and reading the financial reports (a mistake I sadly repeat about once every 2-3 years). Boy was I excited, there couldn’t be a more obvious short out there and I was ready to pick up some puts! But then I remember the last time (and the time before that) when the earnings were absolutely trash and Elon spewed some other random BS Kool Aid and how the stock is up massively since then.
I can’t wait to watch this stock implode, but I can’t think of what catalyst (other than Elon dying or losing interest) that could actually trigger the meltdown. They are constantly moving on to new fake promises to keep the hype train rolling and clearly nobody buying the stock cares about silly things like revenue and profit.
Only 3 years ago it fell 75% from top during a correction, it will be more when we get the crash.
It will come eventually, and i don’t see much fuel for the Tesla stock out there apart from hopium. Worst case if they suddenly launch a new model out of the blue?
It’s not just Elon’s political nonsense that has Tesla in trouble but the fact that he hasn’t introduced a new model other than the outlandish cyber truck in a decade. He’s actively telling people that his investments are going elsewhere, so folks will also look elsewhere when they decide an EV is right for them. For some, EV and Tesla are synonymous. But looking at the market and everyone is producing something better than Tesla. Elon needs to hire a proven car guy to run Tesla, back off and focus on his other investments.
To be fair, the Model Y was introduced in 2019 and put into production in 2020 but otherwise I agree as it is really a variation of the M3 in many ways. The lineup is aging fast and the most recent versions of the MY and M3 are just updates to the existing vehicles. I think a lot of this is because they are so heavily invested from a manufacturing perspective in building exactly the MY and M3 so to re-tool will be immensely expensive. CT is a failure. So the options going forward would be to keep making the M3 and MY and thus the price will need to plummet to keep selling them as-is or come out with a new vehicle.
It seems like the auto industry has people conditioned to want a “new model” to impress people and show that they have a “new model”. With that said I so think that the recent updates to the Model 3 and Model Y make them look better. I also think it is funny to see people with brand new Model 3s and Model Ys that have “I bought this before Elon went crazy” stickers.
The reason for Tesla’s rapid depreciation? They’re doing exactly what they promised: riding the cost curve downward with smarter manufacturing, making EVs cheaper and more accessible for everyone. As new Teslas get more affordable, used ones naturally follow suit, it’s the beautiful logic of progress.
Were you the one who dropped $10K on that brick-sized first flat-screen TV, only to weep as sleeker, superior models flooded the market for pennies on the dollar a few years later? 🤣
Can’t win: First, Teslas were “too expensive.” Now they’re “too cheap.” Gotta be exhausting, forever chasing those shifting goalposts.
1. Wait a minute. This article is about NEW vehicles, and NEW Teslas. But “Tesla’s rapid depreciation” that you mention is for USED vehicles, and NO ONE here talks about used vehicles except you.
2. Since you brought it up, used EVs and Teslas have seen appreciation (with an A) recently and their used values are now substantially higher than ICE vehicles. In other words, used EVs are relatively expensive, and that includes Teslas.
This is from another article that IS about used vehicles:
https://wolfstreet.com/2025/08/07/used-car-truck-wholesale-prices-amid-solid-retail-demand-and-tight-supply/
Very interesting. It’s good to see that Federal taxpayers are no longer forced to subsidize expensive EVs for rich people. They should compete against gas luxury cars on their own merits and be fully paid for by their wealthy owners. Now the government needs to replace the gasoline tax with a tire tax and get EV owners to finally pay their share of road maintenance costs.
And Congress needs to increase the fuel tax so it brings in enough money to pay for roads, rather than needing periodic infusions of general taxpayer fund dollars.
Congress hasn’t raised fuel taxes since 1993.
First thy need to reform the entire procurement and construction progress for major projects
Then you must be furious with the 10’s of billions we subsidize the oil industry every year. God forbid the little guy getting a break to buy a car. My EV is a Chevy. Not exactly a car for your so-called rich people.
Please list a few of the unique oil subsidies and their dollar value.
Would be interesting to see pure ICE vehicle data. Hybrids are popular and are likely propping up ICE sales data. Waymo should pick an auto maker and merge, or lease out their tech. What is their longterm plan?
Hybrids = ICE. You go to the gas station and fill it up. Hybrid is just a more efficient ICE powertrain.
I think plug-in Hybrids are the obvious solution that no one talks about.
Trip length breakdown
Less than 3 miles: More than half of all car trips.
Less than 6 miles: Over 59% of all vehicle trips.
Less than 10 miles: About three-quarters of all car trips.
Less than 31 miles: About 95% of trips.
So a Rav4 plug-in has a range of 42-50 miles depending on the year and weather. That could easily cover 75% of trips people make. Or we could invest in better cycling infrastructure as well.
I would actually support a tax credit for plug-ins. A Rav4 starts at 48k new so it is still “expensive” but the new normal for a realiable vehicle.
“Less than 3 miles: More than half of all car trips.”
Doesn’t anyone walk anymore?
Lol yeah I know. That’s why cycling infrastructure is more important to greenhouse gasses than what vehicle you drive. Would also help with weight loss
We own a full EV (Audi Etron) and a PHEV (Lincoln Aviator). Both are fantastic vehicles. 100% of Etron driving has been around town since purchase until about a month ago when I decided to do a road trip in it. What a horrible experience. It cost materially MORE than a gas car to take the same trip (I paid $0.45-0.75/kwh to “fill up). While I had to sit and wait for the charge, I did some simple math. At 3kwh/mile (which is high end for any EV on the highway) I paid 15-25+ cents per mile.
At $2.69/gallon for gas and, for simplification, 26.9 mpgs on an ICE (my wife’s aviator gets 32mpg highway), it’s 10 cents a mile.
With that EV favorable math, I still paid 1.5-2.5x for the trip and added 50% wasted time (6 hour trip, 3+ extra hours to find and use EV chargers). Eventually even the dumbest people will figure out that EVs using paid public charging are more expensive than even the least efficient gas cars. I will never do a road trip in an EV and am shocked that anybody would do it more than once.
This is in the Midwest and maybe is closer to parity in CA, but I think the math is only likely to get worse as more pressure is put on electric prices from massively increasing consumption.
On the PHEV side, our Aviator gets about 25-30 miles range on a charge. Aside from road trips, we have filled up gas maybe 2 times in 12 months. Almost all of our driving around town is fully electric.
Ah the lie that just won’t die. NO ONE uses FAST public charging 100% of the time so NO ONE has the experience you describe over the long term. And of course no mention is ever made of cooling systems, transmissions, electrical and engine issues which add 1000’s over the life of your car. Never mind not having to choose between locking your car and keeping your pets comfortable, being able to stay comfortable without the engine running and doing the environment a solid.
FWIW, we bought a Mach-E–I refuse to call it a Mustang; I’ve owned several over the years–on a ‘spur-of-the-moment’ (though I’ve been evaluating them for some time). We’re retired in Modesto, CA, and most of our driving is around town, so the car is perfect of us. Note we also own several ICE cars: an old Ranger for farm duty, a ‘real’ Mustang GT for trips and a couple old British sports car because, well, just because.
My wife just made the first trip in the Mach-E; round-trip to her stepmom’s in the Santa Cruz mountains, over the Altamont and up the Hwy 17 grade (184 miles total). I charged to 100% before her trip–not advisable to do often–then to 90% at home*. The local utility–an ‘irrigation district’–offers off-peak charging at $0.135KwH, and she used 40Kw so we paid $5.20. The same trip in the 2020 Fusion we traded in for the Mach-E used 12g for the same trip; the nearby Costco sells 87 for currently $3.75g, so $45 for the same trip. We make a round trip to Sacramento International a few times a year, which we’ll easily make in the Mach-E.
* Ford ‘threw in’ their charging port plus installation costs, nominally a +/- $3K operation. But, the electrician sent to do the job took one look at our 50YO breaker panel and said “I can’t touch it; it’s obsolete and they’re known to cause fires.” New breaker, plus wiring to the pole mandated by ‘irrigation district’ cost $15K, but it’s worth it to not have my house burn down. The charging system has known issues, and Ford seems reluctant to get them fixed, but for now I can live with them.
AS, I’ve made 3 round-trip road trips greater than 1,000 miles each in my Model Y over the past year. Each trip was approximately 12 hours including drive time and charging. Approximately 1-1.5 hours of charging. I stopped to charge about every 2 hours of driving, which is perfect for stretching legs, using restroom, grabbing food, and taking a mental break (although much less needed because my car did 95% of the driving for me).
You’re uncharitably generalizing that EVs are inefficient for road trips based on your personal experience of marching the time taken to drive with time taken to charge. That’s not a normal experience with a Tesla stopping at superchargers.
Yes, it’s a bummer that comparatively, gas is currently cheaper than charging mile for mile. I made a hedge that gas would increase and now I’m realizing that opportunity cost. But for me, my 2024 Model Y is my favorite vehicle ever driven (second being 2020 BMW 330i for reference).
I agree with common sense’s general point. Most charging will be at home for relatively cheap. I do agree that if you don’t have a way of charging at home or at work (cheaply), I wouldn’t recommend buying an EV at this time.
Hyundai cut the cost of their EV lineup by more than the federal tax credit. Battery costs have continued to go down. Your readers tend to be older so I don’t think they appreciate how far behind the ball that ICE has gotten.
Yep.
Most completely new vehicle platforms will be hybrid or pure EV. You won’t see many new big gas guzzlers outside of certain body on frame vehicles designed for towing or working, and specialty performance vehicles where the engine noise is a key selling point.
I continue to be floored by the lying and BS from the financial media. “Low inflation reading paves way to further rate cuts!”
It turns out that the “estimates” were 3.1%, which was artificially high, so that 3.0% can be celebrated. We’re living in the twilight zone.
I can’t wait for Wolf’s inflation report. It’s usually 180 degrees opposite of whatever CNBC claims. Amazing how 2 people can look at the same report and see 2 very different things (usually.. who knows maybe this time is different).
https://wolfstreet.com/2025/10/24/massive-outlier-in-owners-equivalent-of-rent-pushed-down-cpi-core-cpi-core-services-cpi-something-went-awry-at-the-bls/
Is the EV market cracking? Rivian just announced they are laying off more than 600 employees. Volkswagen said their newer EV the ‘ID Buzz’ isn’t selling well – imagine all the millions they put into R&D and then the cars don’t sell.
You’re headline partially contradicts the body of your text -“ ICE Vehicle Sales Plunge” but in the body of your text “, you state
“ 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.” Doesn’t sound so well for EV sales. Bad omen?
Lastly – did you hear that Tesla offered their CEO a potential pay package of one TRILLION dollars?
That is insanity on steroids. Make’s schizophrenics seem sane. What are they smoking?
CA rob people at the pump. The average gas price in TX is $2.50. In New Orleans: $2.25. In SF $5/gallon. Total registration (110K ev + 340K Ice = 450K). EV is 25% of the market. Model Y is a nice car.
Who cares about Tesla, vast fortunes are being made with Beyond Meat speculation — anybody not smart enough to see that is blind.
Who wants a speculative dinosaur car company when you can make bets on hybrid burger patties?
Ok, in reality, I’m losing the plot.
To move the plot forward: BYND has been re-collapsing.