Hybrid Sales Soar While EV Sales Plateau

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At CleanTechnica, we are all in on electric cars, but that doesn’t mean everyone is. In fact, as companies like GM and Ford are lowering the EV production targets, sales of hybrid vehicles have been soaring. The Associated Press reports that, according to Edmunds, Americans bought more than one million hybrids so far in 2023, which is up 76% from the same period last year. That comes as sales of hybrids had been declining for several years. This year’s figures don’t even include sales of 148,000 plug-in hybrids.

What’s going on with hybrids? One, more Americans seem to want to make a difference in the fight against global warming but are not ready to commit to battery electric cars. Two, hybrids cost at most a few thousand dollars more than traditional models while full EVs can are priced ten thousand dollars or more higher. The combination makes a hybrid an appealing option for many drivers.

EV Concerns Fuel Hybrid Sales

Surveys show that consumers remain uneasy about either the availability of charging stations or the sale prices of EVs — even after federal tax credits are factored in. “Your standard hybrid makes the most sense to most people,” Ivan Drury, a director at the Edmunds tells AP. “I think you’ll find that people don’t want to deal with the hassle or the difficulties of charging.”

There is another factor that no one is mentioning. Toyota sells the most hybrids by far. For years, the styling of its flagship hybrid, the Toyota Prius, was deliberately different from the conventional cars the company manufactured. In fact, the last version of the car, whose styling was heavily influenced by Akio Toyoda, was so ugly that sales dropped precipitously. But a next generation Prius was released earlier this year and it is drop dead gorgeous, especially in comparison to the version that preceded it. That has to be a factor in the sales game. People don’t really like ugly cars, no matter how efficient they may be.

American manufacturers have been cutting hybrid models from their lineup, which means they are being caught short by the surge in demand for hybrid vehicles. Ford expects to quadruple hybrid sales within five years. The company has been surprised at how popular the Maverick hybrid pickup truck has been. While the Blue Oval brand has been dialing back production of the F-150 Lightning due to softening demand, customers are clamoring for the Maverick hybrid and the company is struggling to meet the demand.

General Motors, which abandoned most hybrids in the U.S. four years ago in favor of EVs, now says it’s considering bringing them back. That just goes to show that what market research companies do is little more than harvesting opinions. Nobody saw the demand for hybrid vehicles increasing. At most, many of us who pontificate about the future of the car business thought plug-in hybrids would be the fall back position of choice for people who are still too skeptical to take the plunge into the EV future.

A Hybrid Is More Efficient

While a hybrid does have tailpipe emissions, it uses less gasoline than a conventional car.  Higher efficiency means lower pollution. “People are perfectly fine with a car that gets 45 or 50 miles per gallon, and you don’t have to do anything” different from current behavior, said Scott Adams, owner of a Toyota dealership in suburban Kansas City.

More people are growing concerned about how burning fossil fuels is leading to higher global temperatures, which in turn lead to stronger storms, drought, and flooding. “People want to participate in this — the idea of reducing carbon,” said Jack Hollis, who heads North American sales and marketing for Toyota, which is the leader in hybrid sales. “I think the hybrid gives them what they’re most looking for.”

The price of new cars is a factor as well. After peaking at nearly $63,000 last year, the average EV sale price fell to just over $60,500 in November, not including tax credits. Fewer EVs will qualify for the tax credits or rebates in 2024 because of rules that will limit buyers from claiming a full credit if they purchase cars with battery materials from China or other countries that are considered hostile to the United States. The average price of a hybrid has stabilized at roughly $42,000. A Toyota RAV4 hybrid with all wheel drive, for example, starts at $32,825 — $1,600 more than a comparable gas version.

The Environmental Protection Agency says a front wheel drive CR-V Hybrid gets 40 mpg in city and highway driving — 10 mpg better than the gasoline powered version. An owner of a hybrid CR-V who drives 15,000 miles annually would save $450 a year on fuel over the gas model. (Gas prices, of course, rise and fall over time. Higher gas prices mean a faster pay back on the difference in price between a conventional and a hybrid model.)

Angie Rodesky, who recently moved to Jefferson City, Missouri, told AP her children wanted her to buy a Tesla to replace her old vehicle. Though she did consider an EV to help reduce emissions, she settled on a RAV4 hybrid because she travels frequently to see children in Florida and Delaware. “I have a fear of plugging something in and not being able to travel as far, because it’s a 16-hour road trip from Delaware to Missouri,” Rodesky said. “I needed to make sure I had a vehicle that was comfortable to ride in and had good gas mileage.”

Dipping A Toe Into The World Of EVs

Brad Sowers, owner of Jim Butler Kia near St. Louis, said customers who consider EVs often ask for hybrids or other alternatives. “They look at it as a baby step into the EV world. They’re saying to themselves, ‘I can’t really do 100% battery psychologically.’ ”

Dealers also say many hybrid buyers appear to have done research and know that cold weather reduces the range of an EV battery. Tests conducted in Norway, where nearly 80% of new vehicles are electric, found that EVs lose between 10% and 36% of their range during winter. Most US electric car purchases occur on the east and west coasts where charging stations are more prevalent and weather is often warmer. In the Midwest, where stations are farther apart, Sowers said consumers worry about decreased wintertime range. “It’s cold here,” he said. “The (charging) infrastructure isn’t that great.”

In its auto reliability survey this year, Consumer Reports found that hybrids were the industry’s most reliable type of power system. Electric vehicles were least reliable. EVs contain glitch-prone new technology, Consumer Reports said. Hybrids have less gee whiz electronic stuff to go haywire. But according to AutooinsuranceEZ, the incidence of vehicle fires in 3474.5 per 100,000 sales. For conventional cars, it is 1529.9 per 100,000 sales, and for battery electric cars it is 25.1 per 100,000 sales. The figure for hybrids includes plug-in hybrids, which skews the numbers a bit, but the point is that while hybrids do some things really well, they still have a downside that shoppers should consider before making a purchase decision.

Analysts  think more EVs than hybrids will eventually be sold in the United States as more EV charging stations come online. By the end of 2025, most electric cars in the US will be able to use theTesla Supercharger network, which should calm many of the fears people have about charging. AP also says charging times will get faster and cold weather performance will improve as well. What those experts are really saying is that, with the exception of  Tesla, electric cars are really not ready for prime time in many parts of the US, although the barriers to acceptance are slowly being overcome.

In addition, as of January 1, 2024, the federal EV tax credit converts to a point of sale rebate, which will greatly simplify the EV buying experience, at least for models that qualify under the latest Treasury Department rules and regulations.

Toyota Leads In Customer Deception

On December 13, 2023, Public Citizen filed a complaint with the Federal Trade Commission alleging that the way Toyota markets its hybrid vehicles is misleading and confusing to customers. The complaint reads in part:

“Toyota has launched a marketing campaign that uses the term “electrified” to paint its existing hybrid models—which are gasoline-powered—as electric vehicles.[4] Through its “Beyond Zero,” “Electrified Diversified,” and “To Each Their Own Electric” marketing campaigns and other advertising practices, Toyota is mendaciously relabeling a number of cars with internal combustion engines “EVs” and representing vehicles that run on fossil fuels as “electric” and “electrified.”

“These representations are misleading consumers about the climate and economic benefits of Toyota’s hybrid cars as compared to EVs. Consumers typically understand the words “EVs” and “electric vehicles” to refer to cars that are fully, or at least meaningfully, electric[5]—and for that reason materially superior to hybrids regarding climate impacts, cost of ownership and maintenance, and other factors. Toyota’s practices are also introducing disinformation and confusion into the market for electric vehicles, undermining fair competition and consumer choice in one of the most important, dynamic, and fast-developing sectors in the U.S. economy.”

American consumers are confused enough about the transition to electric cars. Toyota shouldn’t need to resort to such disingenuous marketing ploys to sell its cars. We are monitoring the response of the FTC to the Public Citizen complaint.