California drivers are paying more than $6 for regular gasoline, putting a pressure on household budgets and giving some people another reason to consider an electric vehicle.
But higher gas prices don’t necessarily mean drivers will rush to buy one.
California’s sales of zero-emission vehicles rebounded in the second quarter of 2026 even as the national market cooled following the expiration of federal tax credits.
Researchers say the recovery highlights a bigger challenge for the state’s transition away from gas-powered cars: Drivers need affordable electric vehicles to be available and the economics of owning them long-term needs to make sense.
Gil Tal, director of the Electric Vehicle Research Center at UC Davis, said California’s recent sales growth was concentrated in models that automakers had available to sell. The issue with that is many of them have stopped or slowed down production of their EVs in the U.S because of lost incentives and loosening of emissions standards that make gas-powered cars, including hybrids, better investments.
“We have no leverages on the car companies,” Tal said. “When gas prices are really high, people are looking for EVs, but there is not enough supply.”
UC Davis Electric Vehicle Research Center Director Gil Tal plugs in an EV Friday, Sept. 25, 2026, at UC Davis.(Gerardo Zavala/CapRadio)
Affordable EV models are scarce despite market re
bound
California sold nearly 87,000 new zero-emission vehicles in the second quarter of 2026, which accounts for about a fifth of new-car sales, according to the California Energy Commission.
That includes electric vehicles, plug-in hybrids and hydrogen-powered cars. Electric Vehicles represent the vast majority of those sales by themselves, accounting for roughly 17% of new-car sales in the state.
That’s nearly three times the national average of 6% of new-car sales being EVs during the same time period.
Tal’s research suggests that vehicle availability helped drive California’s rebound while the expiration of federal incentives contributed to a downturn in demand across the country as automakers pulled back on some electric models.
When gasoline prices climbed, Californians — and Americans in general — increasingly looked for electric vehicles but found that the supply of affordable options limited their choices.
“Our market is very limited on affordable cars — any affordable cars — in the U.S.,” Tal said. “If you drive one country to the north or one country to the south, you will find many affordable EVs that are not offered here.”
Tal said that means consumers showing up to dealerships looking for their ideal electric vehicle might not find any, which has led many to purchasing alternatives like hybrids instead.
“In California, I think that many people used to go to Tesla, but now there are other reasons for people not to like Tesla,” he said. “If you have a large family and you look for a seven-seater or if you are looking for a more affordable [vehicle], the number of models in these segments is very limited.”
His research found that most of the country is shifting towards hybrids in response to high gas prices — over $4 on average nationally. He said the share of new hybrid vehicle sales jumped from 13.3% to 16.9% between January and May — roughly 35,000 more hybrid buyers a month, dwarfing California’s “plug-in” rebound.
High electricity prices have also made convincing consumers to make that transition even more difficult. In response to that and the loss of federal incentives, the state recently launched its own incentive program to encourage Californians to ditch the pump for the plug.
California’s rebate program lowers upfront cost
California is trying to lower the upfront cost through MyFirstEV, a program offering qualifying first-time zero-emission vehicle buyers up to $3,500 toward a new vehicle and $1,750 toward a qualifying used one.
The program combines state funding with contributions from automakers for roughly $271 million in total incentives. It’s run by the California Air Resources Board, or CARB.
CARB communications director Lindsay Buckley said early demand has been strong.
“One early indicator of its success was Tesla, a California company that participated,” she said. “They actually sold out in a week.”
But rebates can only help people buy vehicles that are available. Tal’s research suggests that automakers’ supply decisions will remain a key factor in whether the state can sustain its recent sales growth.
Republican state Senator Tony Strickland argued that California’s own policies are also part of the problem. High electricity prices, limited charging infrastructure and concerns about energy capacity are three things he said makes transitioning to EVs difficult for most.
“There is no demand right now for the EV vehicle,” Strickland said. “If the technology gets better and more people move towards it, great, but that’s not what’s happening.
Strickland, who is vice chair of the Senate Transportation Committee, also said he’s against using taxpayer money to subsidize EV purchases.
Buckley said the state is monitoring electricity demand and encouraging EV owners to charge outside peak energy-consumption hours to avoid straining the power grid.
High gas prices might not be the only issue
Andrew Campbell, executive director of the UC Berkeley Haas Energy Institute, has cautioned against assuming a spike in gasoline prices will lead to widespread EV adoption.
“I suspect right now consumers understand that prices are high because of the Iran War and that the Iran War and the circumstances around that could change at some point,” he said. “My guess is consumers are not going to make major decisions based on the prices they’re seeing at the pump right now.”
Campbell said Europe’s EV market may offer some clues about what could help expand sales in the U.S.
“They have allowed in Chinese electric vehicles and those vehicles are lower cost than a lot of the other electric vehicles that are available,” he said.
California has limited control over the global vehicle market, including import policies and tariffs. But Campbell said policymakers do have some control over the costs associated with owning an EV.
One possibility is changing how electricity bills are structured. California’s electricity rates often rely heavily on charges for each kilowatt-hour used, but Cambell said a higher fixed monthly charge paired with a lower charge for each additional kilowatt-hour used could reduce the cost of charging.
He also suggested rethinking vehicle registration fees, which are largely based on a vehicle’s value. Campbell said a system that accounts for pollution could better reflect the environmental impact of older, less efficient vehicles.
“The idea of graduated charges would be to not so much set it based on age or value of the vehicle, but instead set the annual registration fees based on the environmental harms that those vehicles cause,” he said.
For renters, charging can be a hurdle
According to the Public Policy Institute of California, renters made up around 44% of Californianas in 2024. Many of them are locked out of purchasing an EV because they don't have access to an affordable place to charge.
Dahlia Garas, research program director for the UC Davis Electric Vehicle Research Center, said California has requirements for new buildings to be equipped for EV charging. The cost of using that infrastructure can vary though.
“If an apartment complex has chargers that are shared, there's no consistency of like a monthly permit or a per-kilowatt-hour charge, or a monthly fee plus a killowatt-per-hour-charge,” she said.
UC Davis Electric Vehicle Research Center Research Program Director Dahlia Garas Friday, Sept. 25, 2026, in Davis.(Gerardo Zavala/CapRadio)
Garas said the impact is even worse for people who live in apartments with no access to charging infrastructure.
“That pushes people out to public charging and particularly DC fast charging, which is the least economical way to charge a vehicle,” she added. “That puts EVs at a financial operation cost disadvantage.”
How are drivers reacting?
At a Sacramento gas station, drivers say they are feeling the pinch while at the pump, but not necessarily enough to consider an EV.
Mark Haw was filling up his Honda CR-V at Interstate Gasoline in East Sacramento. He commutes from Elk Grove and said he’s considering a hybrid rather than an EV because gas prices are going to come down eventually.
“It costs me about $20 a week more in gas for me to commute to and from my job,” he said. “And so it makes for smaller meals.”
Lillian Schmidt paid $70 to fill up her Volkswagen Golf at the same station.
“We’re going to run this thing into the ground and then if we need to decide that we do need a second vehicle or if we have to replace this one, that one will be some sort of hybrid or EV, solely,” she said.
