Hybrid loyalty, sales share reach record highs

Customer loyalty to hybrid vehicles reached a record high in the first quarter as demand for electric vehicles continued to wane.

Forty-two percent of hybrid owners who returned to the market in the first quarter purchased another conventional or plug-in hybrid, according to S&P Global Mobility.

It marks the seventh consecutive quarter that hybrid loyalty has increased.

Sales of conventional hybrids more than doubled in the quarter compared with a year earlier, according to Cox Automotive. Plug-in hybrid sales rose 59 percent. Together, they made up about 11 percent of light-vehicle sales, a record high, Cox said.

Hybrid growth contrasts tepid EV demand. EV share was relatively flat at 7.2 percent in the first quarter, compared with 7.3 percent in the first quarter of 2023, according to Cox estimates.

While hybrid consumers keep coming back, EV buyers are looking elsewhere. More than 40 percent of U.S. EV owners said they want to go back to internal combustion engines gasoline-powered vehicles, according to a McKinsey study. Inadequate public charging infrastructure was a primary reason.

Cost is one of the biggest drivers of hybrid sales, said Thomas Libby, associate director of industry analysis and loyalty solutions at S&P. Many hybrids have sticker prices under $30,000. The average transaction price for an EV almost doubles that, exceeding $57,000 in May, according to Cox.

Prospective EV buyers "may have a problem with the high price," Libby said. "When they look at the hybrid, they can see that is a much lower price, but they're still getting some electrification."

Many customers also prefer hybrids over EVs because they worry about long charging times and limited infrastructure, said John Iacono, co-president of BRAM Auto Group in New York City.

Climate-conscious buyers also consider hybrids a way to reduce carbon emissions, Iacono said. "It takes cares of their sensitivity to the environment, but yet doesn't alter their lifestyle," he said.