Texas Is About To Pass California For The Most Cars Sold

For as long as most of us can remember, California has been the undisputed heavyweight champion of the automotive world.

If an automaker wanted to launch a new vehicle, California mattered. If a manufacturer wanted to test new technology, California mattered. If the industry wanted to know where trends were headed, California was usually the place to look.

Now, according to a new Automotive OEM Intelligence Report from J.D. Power, that may be changing.

J.D. Power says Texas is on the verge of overtaking California as the nation's largest retail new-vehicle market. While California still holds the lead, the gap has narrowed dramatically over the past six years.

In 2019, California accounted for 12.5% of all U.S. retail vehicle sales while Texas represented 9.3%. Fast forward to 2026, and California's share has slipped to 11.4% while Texas has grown to 10.8%. That leaves a difference of just six-tenths of one percentage point between the two states.

Put another way, Texas is gaining ground fast.

Based on J.D. Power's forecast of 16.3 million retail vehicle sales nationally this year, California is projected to sell about 158,000 fewer vehicles annually than it did in 2019, while Texas is expected to add nearly 197,000 sales during the same period.

What's even more interesting is that Texas has already taken the lead in one category that automakers care deeply about: money.

According to J.D. Power, Texas has led the nation in total consumer spending on new vehicles since 2024. Even though California still sells slightly more vehicles, Texans are spending more overall on new cars, trucks, and SUVs.

Before anybody starts turning this into a Texas-versus-California debate, that's not really what this story is about.

In fact, I have some of my largest radio audiences in both states, and the reality is that both remain enormously important to the automotive industry.

California continues to be one of the most influential automotive markets in the world. It remains the leader in electric vehicle adoption, often drives emissions and regulatory policy, and is home to millions of passionate car buyers. California isn't disappearing from the automotive map anytime soon.

Texas, however, is experiencing something California isn't: rapid population growth.

People continue moving to Texas from around the country. Businesses continue relocating and expanding. Communities continue growing. More people means more drivers, more families, more businesses, and ultimately more vehicle sales.

There's another factor at work too.

Texas buyers overwhelmingly favor trucks, SUVs, and larger vehicles. Those vehicles typically carry higher transaction prices and generate more revenue for manufacturers and dealers. That helps explain why Texas has already surpassed California in total dollars spent on new vehicles.

So why does any of this matter?

Because automakers pay attention to where their customers are.

When a state becomes the nation's largest vehicle market, manufacturers notice. Marketing budgets follow. Product planning decisions can follow. Dealer investments can follow. Special vehicle launches and promotional events can follow.

For decades, California has often been viewed as the automotive industry's crystal ball. Increasingly, Texas is becoming impossible to ignore.

As someone who has spent a lifetime in the automobile business, I find this shift fascinating. Not because one state is winning and another is losing, but because it reflects how dramatically the American marketplace is changing.

The center of gravity in the auto industry has always moved toward where consumers live, work, and spend their money. Today, more and more of that activity is taking place in Texas.

Will Texas officially claim the top spot this year? Maybe. Maybe not.

But one thing is clear: what once looked impossible is now within striking distance.

And if Texas does ultimately pass California, it won't just be another statistic. It will mark one of the most significant shifts in the American automotive marketplace in decades.

Photo: Mehaniq/Shutterstock.com.