California Is Now the EV Capital of America

When it comes to electric vehicles, Kristin Roberts is a true believer. The Tesla Model 3 she bought in June 2022 is her third EV, and she has no intention of ever again purchasing a gas-powered car.

“I love EVs. They’re fast, they’re fun, and they’re good for the environment,” said the Los Angeles video producer.

Roberts is not alone, as anyone in California is likely to notice. In little more than a decade, zero-emission vehicles (so-called ZEVs) have gone from the rare exception to a part of the automotive mainstream, accounting for fully 24.3% of the new automobiles sold in the state during the first half of the year., and 25.4% during the second quarter.

“California is showing the world what’s possible — fostering innovation and creating space for an industry to flourish,” California Gov. Gavin Newsom said in a statement on August 2. “Thanks to our unparalleled incentives that make it cheaper than ever, we’re not leaving anyone behind.”

Drive around Los Angeles and Teslas are a common site, noted Roberts. But the epicenter of the electric vehicle revolution is in Alameda, San Francisco, and Santa Clara counties. There, zero-emission vehicles (ZEVs) — also including small numbers of plug-in hybrids and hydrogen fuel-cell vehicles — accounted for 40% of the new vehicle market in the most recent quarter, according to industry data.

With its endemic smog problems, few are surprised to see California consumers so readily switching to ZEVs. The state’s motorists were early adopters of hybrid technology when it first came to market two decades ago.

It helped to have celebrities like Leonardo DiCaprio seen driving models like the Toyota Prius, which he called “a step in the right direction” in his 2007 documentary, “11^th Hour.” Since then, DiCaprio has purchased a number of green vehicles, including a Tesla Model S.

Robert Downey Jr., meanwhile, drives an Audi e-tron GT sports car. Ed Sheeran has a Volkswagen ID-Buzz microbus. Snoop Dogg owns a Tesla Model X SUV. And Ashton Kuchner can be seen behind the wheel of his GMC Hummer EV truck.

Star power is only one motivator, however. Electric vehicles can qualify an owner for an HOV access pass, a coveted commodity in traffic-snarled cities like Los Angeles, San Diego and San Francisco.

State regulators have set one of the highest targets for ZEV adoption in the country, and analysts like Ed Kim, president of AutoPacific Inc., see the pass as a powerful motivator, along with various state and local incentives, including one for low-income Bay Area residents who could qualify for as much as $9,500 in assistance.

Newsom, backed by the California Air Resources Board, (CARB), aims to completely phase out the sale of new vehicles using internal combustion engines by 2035 — though used vehicles will still be available for sales.

The state has laid out a series of midpoint targets, Gov. Newsom’s release stating that, with sales to date reaching 1.5 million ZEVs, it’s “a full two years ahead of schedule.”

The statement also noted California motorists purchased 34% of the new zero-emission vehicles sold in the U.S. from January through June, putting the state on track to sell 500,000 for the first time this year.

California is by no means the only state where EV sales are booming. Nationwide, all-electric models have gone from under 1% of the market in 2019 to 7.4% for the first half of this year, said Stephanie Brinley, associate director of AutoIntelligence for S&P Mobility. The U.S. Department of Energy shows Florida had the second-highest adoption rate through the end of 2022, followed by Texas.

As is the case across the U.S., Tesla dominates the ZEV market in California, with 74,488 Model Y SUVs sold during the first half of this year. The Model 3 followed at 41,430. The Jeep Wrangler 4xe was third, reported the California Energy Commission. With a modest 7,341 sold, it was the only plug-in hybrid in the top 10. The rest was made up of models from Tesla, Ford, Chevrolet, Mercedes-Benz, BMW and Volkswagen.

California consumers have the widest range of EVs, PHEVs and fuel-cell vehicles in the country — some models, like the new VinFast EV8, only sold in the Golden State. A flood of new entries are coming, such as the Chevrolet Blazer EV crossover and Ram 1500 REV pickup.

But some observers question whether the fast growth rate will continue. AutoPacific’s Kim cautioned that “EV adoption in California may slow down,” due to a variety of reasons, starting with the relatively high cost of those vehicles.

Up to now, “EV buyers (have) been primarily affluent people who could afford to be in market,” said Kim. “Most EVs reside firmly within luxury price points.”

But that may be changing. Where EV prices peaked in June 2022 at an average $66,135, according to a new report by Cox Automotive, they tumbled to $53,469 last month. And while the average price motorists paid was $18,000 more than the typical gas model in June of 2022, the gap narrowed to around $5,000 in July 2023. Tesla and GM, meanwhile, are planning new entry EVs dipping below $30,000.

The higher price Lee Morrell paid for his Tesla Model Y was more than worth it, said the insurance industry executive, noting he was getting tired of dealing with “rising gas prices and constant fill-ups.”

His energy costs have dropped to $50 a month and access to the HOV lanes makes commuting far less painful. The family keeps a second, gas-powered vehicle for longer trips. But Morrell said he couldn’t imagine not having an EV in the driveway going forward.