In 2023, the automotive industry reached a new milestone as electric vehicle (EV) sales hit record highs. However, through the start of 2024, hybrid vehicles are being purchased at a rate which surpasses that of their fully electric counterparts.
While EVs experienced a 13% increase in sales growth at the beginning of 2024, hybrids have nearly quadrupled that figure. Recent data from automotive inventory and information provider Edmunds indicates that hybrids are leaving dealership lots three times faster than EVs and twice as fast as traditional gas-powered cars.
Industry experts and automakers attribute this surge in hybrid sales to what they term a “halo effect” from EVs. That is referring to a wave of EV-curious consumers who, rather than committing to full electric vehicles, are opting for hybrids. This is because hybrids do not come with the same EV-related concerns such as battery range limitations and charger availability.
The affordability factor also favors hybrids in the current market landscape. In the past few years, the price gap between hybrids and gas-powered vehicles has narrowed substantially.
In 2007, hybrids were priced over 40% higher than traditional gas-powered cars. Now, that difference has decreased to just 9%. Compared to electric vehicles, hybrids are almost 50% cheaper on average, even before factoring in additional costs associated with EV ownership like home charger installation, maintenance fees and resale value uncertainty.
The recent surge in hybrid sales has prompted several automakers to reconsider their strategies regarding these vehicles. Nissan and Volkswagen are exploring the introduction of plug-in hybrids to the American market. General Motors — initially skeptical about the future of hybrids in its U.S. lineup — is now planning to roll out new models in North America. Ford is also gearing up to quadruple its hybrid sales over the next five years.
Despite the momentum gained by hybrids, electric vehicles are still anticipated to play a significant role in the future of transportation.
Projections suggest that EVs will surpass two-thirds of global car sales by the end of the decade. In the interim, however, consumers are turning to hybrids as a viable option to transition from conventional gasoline-powered cars amidst the ongoing shift towards electric mobility.
