Insights

Automotive OEM Intelligence ReportJune 2026California’s total market share of new-vehicle sales fell to 11.4% so far in 2026, while Texas is on the rise, now claiming 10.8% of all new-vehicles sold in the U.S.Texas has been the top market by dollars spent for three years, driven by high pickup truck pricesVehicle mix, financing trends, car culture to be heavily influenced by eastward migrationFor decades auto industry observers have characterized the California new-vehicle market as not only the nation’s largest, but also the nation’s bellwether. “Auto trends start in California” is a mantra that has been repeated so often that few doubt its veracity. But that long-standing assumption about the U.S. auto industry is poised to be turned on its head. New JD Power data suggests Texas is rapidly closing the gap in retail vehicle sales and has already surpassed California in total consumer dollars spent. If current trends continue, Texas will emerge as the largest automotive market in the United States, marking a fundamental shift in not only where vehicles are purchased but also what they are.What do these trends mean for the future of the auto industry and automobile culture as we know it? This JD Power Automotive OEM Intelligence Report dives into key insights gathered from JD Power proprietary market data to offer a data-driven perspective on the geographic migration of new-vehicle sales trends.A Narrowing Gap in Sales Leadership            At the beginning of this year, California maintained a modest lead over Texas in new-vehicle retail share. Within just a few months, that lead has been cut dramatically, falling to just half a percentage point just one quarter into 2026. The speed of this change is notable. While California has held the top position for decades, dating back to its population boom in the mid-20th century, Texas is now within striking distance of overtaking it in total sales volume.The numbers are plain. California's retail share of U.S. light-vehicle sales has declined from 12.5% to 11.4% currently while Texas’ share has grown from 9.3% to 10.8%. The gap has narrowed from 3 points to just 0.6 points over the course of less than six months. Based on a 16.3 million retail sales forecast for this year, California is projected to lose about 158,000 sales while Texas will gain some 197,000 versus the 2019 averages.  Even more significant is that Texas has already claimed the top spot in total consumer spending on new vehicles. Texas now leads California in consumer expenditure share: 10.7% vs. 9.9% and the Lone Star state has led the nation in consumers expenditures on new vehicles since 2024.  Shift in Segment Mix is Bigger Than Just PickupsThe shift in the importance of the Texas market is not simply a function of population growth, though that is a major driver. It also reflects differences in vehicle mix and transaction prices that could provide hints on the direction of the nation’s new-vehicle market.Texas buyers’ love affair with pickup trucks is one key factor explaining the Lone Star state’s richer dollar-per-transaction results. Pickup trucks represent 27% of Texas sales versus about 17% of California sales. But the truth is more nuanced than that. Across many segments beyond trucks, Texas buyers appear to skew more toward mainstream brands than status-conscious California, where higher lease penetration and luxury brand preference is significantly higher.California has long served as the last major stronghold for sedans, a segment that has been in steady decline nationwide. As California’s influence wanes relative to Texas, the shift toward trucks and SUVs could gain further momentum, and the business case for engineering new sedan models would become even more challenging.At the same time, while one might assume oil-rich Texas would be a bleak market for electric vehicles, the reality is that recent EV sales in Texas are more resilient than might be expected. Texas is one of the few markets where EV share has remained relatively stable even as those sales in other states have experienced noticeable downturns.Financing and Lease Volumes in the CrosshairsBeyond segment mix and trends in vehicle preference, there are also some fundamental differences in the ways in which consumers buy new vehicles in California and Texas. Chief among them is a stark difference in leasing volumes. State tax policy in Texas makes it prohibitively expensive to lease a new vehicle in the state. As a result, 69% of new-car buyers in Texas pay cash or arrange outside financing when purchasing, 23 percentage points higher than in California, where leasing is a significant conduit to new-vehicle acquisition. In California, 30% of new-vehicle transactions are leases, the second-most common acquisition method behind cash purchases.Similarly, loan terms are one-and-a-half months longer, on average, in Texas, and – importantly – auto dealers in Texas earn an average of $2,200 in financing and insurance (F&I) revenue for every vehicle sold, which $400 more per vehicle than dealers in California. This puts a significant focus on vehicle financing as a critical component of the auto sales profitability equation as Texas becomes the dominant automotive market in the U.S.A New Center of GravityThe broader narrative is one of geographic and economic realignment. The bellwether of the U.S. auto market is shifting away from its traditional West Coast nexus toward a new growth-driven region. Texas, with its expanding population, strong economic base, and evolving consumer preferences, is increasingly shaping the direction of the industry. California has been the spiritual center of car culture in the U.S. since the 1950s. It was the Petri dish for hot rods, customization, and Japanese imports, all sung to the tune of Beach Boys songs. Not only did many major automotive brands set up shop in California, but the Golden State also welcomed hybrids and then EVs with open arms far sooner than the rest of the country.Now all that is shifting. If current trends continue, Texas will not only surpass California in sales but also redefine the characteristics of the nation’s automotive market. For automakers and industry stakeholders, the message is clear: understanding Texas is no longer optional. It is essential.Find Out MoreThis Automotive OEM Intelligence Report is based on insights gathered from JD Power intelligence and proprietary market data. It was authored by Tyson Jominy, senior vice president of OEM customer success at JD Power. Please contact us at the numbers below to learn more about the underlying research.Media ContactsZak Minert; Central; 714-270-1675; [email protected] Joe LaMuraglia, JD Power; East Coast; 714-621-6224; [email protected]