California sets record for zero-emission vehicle sales. But what happens next?

California set a record for sales of zero-emission vehicles over a three-month period, as customers rushed to buy electric vehicles and plug-in hybrids before federal tax credits expired at the end of September.

Gov. Gavin Newsom announced Monday that the vehicles accounted for 29.1% of all light-duty vehicle sales in the state during the third quarter of this year. The California Energy Commission said registrations came to 124,755 between July and September, breaking the previous quarterly sales record of 118,776 zero-emission vehicles, or ZEVs, set in the second quarter of 2023.

“This is unprecedented — we’re nearing a third of all new vehicles sold in the fourth-largest economy on the planet being clean cars,” Newsom in a news release.

“I’m not surprised,”  said Ivan Drury, senior manager of auto insights at Edmunds.com. “If there were any a time in which we would see a record for this vehicle type selling, now makes the most sense.”

The sales figures come on the heels of the 940-page federal budget legislation dubbed the “One Big Beautiful Bill” backed by Republicans on Capitol Hill and signed into law in July by President Donald Trump. The package included provisions that eliminated the federal tax credit of up to $7,500 on the purchase or lease of a new EV, or $4,000 for a used one, as of Sept. 30.

Earlier this month, makers of electric vehicles reported boosts in third-quarter sales, as consumers across the country jumped in before the tax credits went away. Rivian, for example, reported a surge of nearly 32% between July and September, and Tesla — the popular maker of EVs in the U.S. — saw a 7% bump in deliveries.

The big question centers on whether the momentum will hold up in succeeding quarters, especially considering California’s aggressive electric vehicle targets and headwinds from the Trump administration.

Five years ago, Newsom issued an executive order mandating the elimination of sales of all new gasoline-powered passenger vehicles throughout California by 2035. But in June, Trump signed three Congressional Review Act resolutions rescinding California’s electric vehicle mandates — as well as rules related to diesel engines.

California and 10 other states have responded by filing a lawsuit, arguing that Trump’s actions are unconstitutional and beyond the authority of Congress.

“While the federal government stumbles backward with reckless rollbacks and short-sighted policies, California charges ahead lighting the path to a cleaner, more prosperous future,” California Air Resources Board Chair Lauren Sanchez said Monday.

Policymakers said the number of publicly available charging stations across the state now exceeds 200,000 and that California just became the first state in the country to adopt standards to improve reliability and enable accurate reporting of EV chargers in operation across the state.

The California Energy Commission in August launched a $55 million incentive program that would subsidize up to 100% of the installation costs for fast-charging stations at businesses and public sites.

It’s all part of the state’s efforts to reduce “range anxiety” — the fear that drivers could get stranded if their EV runs out of power before getting to a charging station — and encourage potential customers to go all-in on ZEVs.

Nationally, electric vehicles make up about 10% to 12% of national auto sales.

Speaking at a conference two weeks ago, Ford CEO Jim Farley said, “I wouldn’t be surprised if EV sales in the U.S. go down to 5%,” adding that while the zero-emission sector will remain a “vibrant industry” going forward, it’s also “going to be smaller, way smaller than we thought.”

Drury of Edmunds.com said automakers “have an existing consumer base now that has a preference for EVs and because of that they’ll move forward. Combine that with the fact that every automaker is global and EVs aren’t going away anytime soon.”

But with the tax credit gone, Drury expects October sales “should be down a bit,” adding that “the jury’s still out” on whether California can hit its 2035 goals.

California policymakers define ZEVs as electric vehicles, plug-in hybrids and hydrogen fuel cell vehicles. Traditional hybrids without plugs do not count toward the state’s zero-emission targets because they don’t offer the ability to travel without consuming gasoline.