DETROIT (AP) — America's automakers have staked their future on the assumption that electric vehicles will dominate sales in the coming years, driven by buyers determined to reduce carbon emissions and save fuel.
But while electric vehicle sales are growing so far, their pace remains well behind the industry's ambitious timeline for transitioning away from the internal combustion engine. Instead, buyers are increasingly opting for a 25-year-old technology that has soared in popularity: the gas-electric hybrid, which switches from gas to battery power to maximize efficiency.
According to Edmunds.com, Americans have purchased a record more than a million hybrid cars so far in 2023, a 76% increase from the same period last year. Last year, purchases fell below the total for 2021. This year's figures don't even include the 148,000 plug-in hybrids sold, which travel a short distance on battery power before a gas-electric system is used.
Although electric vehicle sales are approaching an annual record of over 1 million this year, their year-on-year growth rate has begun to stall. Electric vehicles still only account for about 7% of all auto sales in the United States.
The slowdown has raised concerns among automakers that buyers' interest in electric vehicles is waning. Some companies are cutting production and scaling back plans for new battery or assembly plants.
The reasons why hybrid vehicles have quickly become the preferred choice for many buyers vary. They range from the higher prices of comparable electric vehicles to concerns about the lack of charging stations to the realization that hybrid vehicles offer many of the same benefits but do not come with the problems of electric vehicles.
Ford, the nation's second-largest hybrid seller after Toyota, expects to produce enough hybrid vehicles to quadruple sales within five years. General Motors, which abandoned most hybrid vehicles in favor of electric vehicles in the U.S. four years ago, is now considering reintroducing them.
Meanwhile, surveys show that consumers continue to have concerns about the availability of charging stations or the sales prices of electric vehicles – even taking into account the tax credits that the federal government provides in many cases for electric vehicle purchases.
“Your standard hybrid makes the most sense for most people,” said Ivan Drury, director of auto website Edmunds.com. “I think you’ll find that people don’t want to deal with the hassle or difficulty of charging.”
Hybrid vehicles emit some exhaust pollution. However, because they use less fuel than cars equipped exclusively with gasoline engines, their emissions are lower. In addition, the purchase prices for hybrid vehicles are on a par with gasoline vehicles and are generally significantly lower than those of comparable electric vehicles.
“People are perfectly fine with a car that gets 45 or 50 miles per gallon, and they don't have to do anything” other than current behavior, said Scott Adams, owner of a Toyota dealership in suburban Kansas City.
Here are some key reasons why hybrid vehicles, which use both a gasoline engine and battery power to efficiently power the wheels, are on the rise this year:
Save the planet
The increase in wildfires, heat waves and increasingly intense storms has led more people to view climate change as a serious crisis that they can mitigate by burning less carbon-emitting fuel. But even among these people, some remain skeptical about whether an electric vehicle will allow them to travel long distances or tow a trailer.
“People want to be a part of this – the idea of reducing carbon emissions,” said Jack Hollis, who heads North American sales and marketing for Toyota, which leads in hybrid sales and has only gradually transitioned to electric vehicles. “I think the hybrid gives them what they’re looking for most.”
A LOWER PRICE
Electric vehicle prices have fallen, largely due to federal tax breaks and price cuts by Tesla, the market leader. However, they are still more expensive than hybrid or gasoline vehicles
After peaking at nearly $63,000 last year, the average selling price of electric vehicles fell to just over $60,500 in November, excluding tax credits or pricing from Tesla, which doesn't release them. However, fewer electric vehicles will likely be eligible for tax credits in 2024 due to rules in place that prevent buyers from claiming the full tax credit if they buy cars with battery materials from China or other countries considered hostile to the United States .
The average price of a hybrid has stabilized at around $42,000. A typical hybrid costs slightly more than its gasoline counterpart. For example, a Toyota RAV4 Hybrid with all-wheel drive costs $32,825, $1,600 more than a comparable gasoline version.
Like many hybrid buyers, Shalinder Singh, an Uber driver from Sunnyvale, California, said that for him, the gas savings helped tip the pricing equation in favor of a 2024 Honda CR-V hybrid model over the equivalent gasoline model.
“The mileage of the hybrid is too good,” said Singh, who frequently travels to San Francisco and San Jose.
The Environmental Protection Agency says a front-wheel-drive CR-V hybrid achieves 40 mpg in city and highway driving, 10 mpg more than the gasoline version. The hybrid CR-V owner who drives 15,000 miles annually would save $450 per year in fuel compared to the gasoline model.
LIFESTYLE NEEDS
Angie Rodesky, who recently moved to Jefferson City, Missouri, said her children wanted her to buy a Tesla to replace her old vehicle. Although she considered an electric vehicle to reduce emissions, she chose a RAV4 hybrid because she frequently travels to visit children in Florida and Delaware.
“I'm worried about taking a hit and not being able to travel that far because it's a 16-hour road trip from Delaware to Missouri,” Rodesky, 55, said. “I had to make sure I had a vehicle that I could drive comfortably in and that had good fuel economy.”
After purchasing a 2023 model from Adams Toyota near Kansas City, she had to wait a month for delivery, largely because of strong customer demand for the vehicle.
Brad Sowers, owner of Jim Butler Kia and other St. Louis-area dealerships, said customers considering electric vehicles often ask about hybrids or other alternatives.
“They look at it as a small step into the world of electric vehicles,” Sowers said. “You say to yourself, 'Psychologically speaking, I can't really handle being 100% battery powered.' ”
COLDER WEATHER
Dealers say many hybrid vehicle buyers appear to have done their research and know that cold weather reduces the range of an electric vehicle battery. Tests conducted in Norway, where almost 80% of new vehicles are electric, found that electric vehicles lose between 10% and 36% of their range in winter.
Most electric vehicle purchases in the U.S. occur on the coasts, where charging stations are more common and the weather is often warmer. In the Midwest, where stations are further apart, Sowers said consumers worry about reduced range in the winter.
“It’s cold here,” he said. “The (charging) infrastructure isn’t that great.”
RELIABILITY
In this year's automotive reliability survey, Consumer Reports found hybrid powertrains to be the most reliable type of power system in the industry. Electric vehicles were the least reliable. According to Consumer Reports, electric vehicles contain new technologies that are prone to failure. Hybrids have less.
And because hybrid vehicles have been sold in the U.S. for more than two decades, automakers have had time to refine the vehicles' engineering and design. In general, vehicles that have been manufactured over a longer period of time are more reliable, said Jake Fisher, senior director of auto testing at Consumer Reports.
Analysts still expect that electric vehicles will eventually outnumber hybrids in the United States. With government help, the industry is building many more charging stations. Ford, GM, Hyundai and others have reached agreements to allow owners of their vehicles to charge at many of Tesla's widely available gas stations. The industry is standardizing its connectors to match Tesla's.
With DC fast chargers, charging times are getting faster and faster. Battery technology will also likely improve range in cold weather.
Additionally, next year, electric vehicle tax credits will be applied at the time of sale, reducing the price and making monthly payments easier. This year, buyers had to wait for income tax returns to receive their money. Additionally, over time, stricter fuel economy and emissions regulations will likely force automakers to sell more electric vehicles.