Toyota Dominates California With Combustion Engine Models — But It Faces A Growing EV Onslaught

Japanese automaker Toyota Motor Corp (NYSE:TM) holds the top spot for the highest number of vehicle sales, particularly combustion engine vehicles, among all automakers in California.

What Happened: According to the latest report by the California New Car Dealers Association, 278,345 new Toyota vehicles were registered in California last year, marking a 2% year-on-year increase. The majority of these vehicles appear to be combustion engine vehicles, as Toyota reported only 3,753 Battery Electric Vehicle (BEV) registrations and 10,889 plug-in hybrid registrations last year.

The best-selling Toyota vehicles in the state include the RAV4, Camry, Corolla, and Tacoma.

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Japanese Automakers Dominate Californian Market: In 2023, the market share of Japanese brands in California was 39.5%, surpassing the U.S. level of 35.9%. Toyota claims a majority of this with a market share of 15.7% in California, followed by Honda Motor Co (NYSE:HMC) with a 9.7% market share.

A total of 172,834 new Honda vehicles were registered in California last year, representing a 33.4% increase. The company’s best-selling vehicles include the Civic, Accord, and CR-V.

Toyota’s EV Outlook Challenged: Despite Toyota Chairman Akio Toyoda‘s recent statement predicting that BEVs would secure no more than 30% of the global automotive market share, leaving the majority to other fuel technologies, the California market tells a different story. 

In 2023, the market share for hybrids was at 11.1%, and for plug-in hybrids, it was 3.4%. However, this combined market share still lags behind the 21.4% for BEVs in the state.

Moreover, within the plug-in hybrid segment, Toyota RAV4 PHEV’s new registrations in the state fall behind the Wrangler PHEV from Stellantis NV (NYSE:STLA) brand Jeep. While 13,351 new Jeep Wrangler PHEVs were registered last year, RAV4 PHEV registrations trail at 7,181 units.

Tesla’s Model Y was also the best-selling car in the state, with a whopping 132,636 new registrations — more than the Toyota RAV4 and Honda CR-V put together.

Interestingly, Tesla CEO Elon Musk said in October that no one would buy an RAV4 if his company’s EV cost the same.  

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