Hybrids replace EVs on industry's center stage

Once all-in on EVs, automakers are now turning to older technologies, including plug-in hybrids and conventional hybrids, as consumers tiptoe rather than race into electric transportation.

Contrarian Toyota Motor Corp., which has deemphasized EVs in the near term in favor of hybrid versions of most Toyota and Lexus models, looks to be the big winner.

But others are gaining ground, too.

Ford Motor Co. CEO Jim Farley said last week that 20 to 25 percent of F-150 pickups Ford is building are now hybrids, a key goal as the company increasingly relies on the powertrain with demand for electric vehicles lagging expectations.

Combined, registrations of hybrid and plug-in hybrid vehicles rose 48 percent to 412,926 in the first quarter of this year compared with the same quarter a year earlier, according to S&P Global Mobility. Meanwhile, electric vehicle registrations grew 5.2 percent to 264,268.

Here's where this market shift stands.

Toyota Motor has sold tens of millions of hybrids globally since it launched the Prius in 1997. That includes selling 657,327 in the U.S. between its Toyota and Lexus brands last year. Toyota's hybrid offerings have grown from the single Prius model to two dozen hybrid or plug-in hybrid models between its brands.

The vehicles accounted for 29 percent of the automaker's total of about 2.25 million U.S. sales, up from 24 percent the year before. For comparison, Toyota offered 14 hybrid models five years ago, which accounted for 12 percent of the automaker's U.S. sales.

Toyota's approach is even paying off in environmentally friendly California, where it received criticism for offering only two fully electric vehicles.

In the first quarter, hybrid registrations from all automakers rose 53 percent from a year earlier, according to the California New Car Dealers Association, versus a 2.8 percent gain for battery-electric vehicles. Registrations for plug-in hybrids rose 9 percent. Market share for full EVs was little changed at 20.9 percent while hybrids and plug-in hybrids, combined, gained 4.6 points of share to 16.6 percent, the dealer association said.

Toyota is taking advantage of this shift to Tesla's detriment. Largely thanks to its hybrid lineup, Toyota registrations rose about 9 percent while Tesla registrations fell nearly 8 percent. Toyota's share rose to 16.4 percent, while Tesla edged lower to 11.6 percent in the nation's top auto market.

To be sure, full EVs are still a hot commodity in California. Even as Tesla suffered a sharp decline in the first quarter, most EV makers, including Rivian, BMW, Ford and Hyundai, saw gains. But, for now, hybrids are having their moment in the sun in the Golden State as many mainstream buyers choose partial electrification over full EVs, which have higher sticker prices and an unfamiliar fueling process.

General Motors had large electric vehicle ambitions, planning to avoid new hybrids and plug-in hybrids. CEO Mary Barra called hybrids a "half-step" that GM could skip over as it focused on fully electric vehicles. Not anymore.

In January, Barra said the automaker would offer plug-in hybrids in certain segments to "deliver some of the environmental benefits of EVs as the nation continues to build its charging infrastructure."

GM's reversal came four years after it discontinued the Chevrolet Volt in 2019. The Volt was among the first plug-in hybrids to go on sale, but sales fell short of expectations as GM struggled to market the vehicle effectively. It sold 157,127 from 2010 through 2021, peaking at just under 25,000 annual sales in 2016, according to the Automotive News Research & Data Center.
GM also used to sell hybrid versions of some nameplates, including the Chevy Tahoe and Malibu. It hasn't given details about any hybrids it's working on; they're not expected until at least 2025.

The discontinued Chevrolet Volt would travel about 50 miles on battery power before the gasoline engine turned on and extend the range to about 400 miles, depending on driving conditions. Although GM scuttled the model, other automakers took note and are selling rechargeable cars that can travel enough distance on electricity for 20 to 40 miles, depending on the model, a daily commute, but also have a gasoline engine to handle road trips without the need to find an EV charger.

Plug-in hybrids accounted for just 2 percent of auto sales last year but are gaining appeal, according to market watchers.

Plug-in hybrids are also getting a boost from regulators, allowing them to be a tool to reach emission targets. California's Advanced Clean Cars II rule, followed by at least a dozen other states, requires zero-emission vehicles to make up 35 percent of new-vehicle sales by the 2026 model year, 68 percent by 2030 and 100 percent by 2035. Automakers can meet up to 20 percent of their zero-emission sales requirements with plug-in hybrids that meet a minimum range of 50 miles, according to the California Air Resources Board.

The Jeep brand has made Stellantis the dominant plug-in hybrid seller in the U.S. Jeep's line of 4xe models so far includes the Wrangler and Grand Cherokee, to be followed by the Gladiator in 2025 and others in subsequent years.

Jeep sold more than 113,000 plug-in hybrids in 2023, with the 4xe versions accounting for 43 percent of overall Wrangler sales and 19 percent of Grand Cherokee volume.

Stellantis also is introducing range-extended versions of some models, beginning this year with the Ram 1500 Ramcharger. A gasoline generator that can power the electric motors allows for a range of up to 690 miles, but unlike a standard plug-in hybrid, that engine has no direct connection to the wheels.

Hybrid models amount to a gaping hole in Nissan's product portfolio.

"It's becoming apparent to everybody [at Nissan's U.S. and global headquarters] that a comprehensive hybrid powertrain product strategy in the U.S. is needed urgently," Nissan National Dealer Advisory Board Chairman Tyler Slade told Automotive News late last year. "That is an opportunity that we're missing."

Nissan has gotten the memo and will respond — eventually. In the next three years, Nissan will bring the third generation of its e-Power series hybrid system to the U.S., likely in the redesigned Rogue crossover.

Ford said it achieved record U.S. sales of hybrids in April. Hybrid versions of the F-150 and Maverick pickups helped volume surge 60 percent from a year ago to 17,997, Ford said.

Kumar Galhotra, president of the automaker's Ford Blue combustion vehicle business, has predicted that the F-150 hybrid could soon become the nation's top-selling hybrid model.

A new Honda Civic hybrid will go on sale this summer as part of a freshening of the entry sedan. Hybrids are expected to make up 40 percent of its total sales. Already, hybrids accounted for half of all Accord and CR-V sales in 2023.

Editor's note: Toyota offered 14 hybrid models five years ago, which accounted for 12 percent of the automaker's U.S. sales. An earlier version of this story had an incorrect percentage.