Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Electric Vehicles

All of a Sudden, Americans Love Hybrids

They seem to be immune from whatever’s ailing EV sales.

•
An American flag and hybrid icons.
Heatmap Illustration/Getty Images

The American EV market has seen its fair share of tumult this year — Ford canceled its three-row SUV, Tesla canceled its $25,000 mass-market EV, and EV sales growth dropped sharply in the first quarter. But from all this darkness, a glimmer of hope has emerged: The market for hybrids is surging.

Electric and hybrid vehicle sales made up 18.7% of all new light-duty vehicles sold in the second quarter of this year, according to new data from Wards Intelligence analyzed by the Energy Information Administration. That’s up from 17.8% in the first three months of the year.

This increase was “driven primarily” by hybrid sales, according to Wards and the EIA, which grew almost 31% from 2023 and made up almost 10% of light-duty sales in the second quarter. Sales of plug-in hybrids grew, as well, while the battery electric vehicle share of the market was about flat compared to the second quarter of last year.

The trend appears to be continuing into the back half of the year. In July, hybrid sales were up about 23% in the U.S. compared to July of last year, and the gap between hybrid and electric sales grew, according to data from Morgan Stanley.

“A lot of the EV slowdown we’ve seen has been really pronounced in the first quarter of this year given Tesla’s performance,” Corey Cantor, an EV analyst at BloombergNEF, told me. “A lot of that story at a macro level is Tesla taking a step back.”

To recap: Elon Musk’s company has not refreshed much of its existing model lineup in several years and is now facing increasing competition overseas from Chinese automakers, plus basically every other automaker in the United States market. It also gutted the team behind its Supercharger network — regarded by observers as one of its biggest differentiators — even as its peers have largely adopted Tesla’s own charging standard. While Tesla used to dominate U.S. EV sales, it no longer makes up even half the domestic market; the estimated 53,000 vehicles Tesla sold in July represented 48% of all EV sales that month, according to Morgan Stanley.

But the travails of one very prominent electric car company aren’t the whole story, and exactly why hybrid sales have been so strong is not exactly clear. Gasoline prices are well off their recent 2022 highs as well as their 2008 recent peak when adjusted for wages. One reason may be that the increased prevalence of battery electric vehicles may have normalized hybrid sales, as hybrids are no longer the most “green-coded’ type of vehicle. (To wit: The “Smug Alert!” episode of South Park aired in March 2006.)

The other reason may be far simpler: cost. Cantor cited Edmunds data showing that in April of this year, even when you throw out Tesla and other direct sellers, hybrids’ average transaction price was about $44,000 compared to $59,000 for battery electric.

“EVs still have a long way to go,” Cantor said. “Hybrids are an attractive option not only because of normalization, but also a lot of them are pretty affordable.” This is especially true for the biggest player in hybrid vehicles, Toyota: A 2024 Corolla hybrid will cost between about $23,500 and $28,500, according to Edmunds, while a standard Corolla goes for between $22,000 and $27,000.

This combination of higher prices and slacking demand for BEVs explains why Ford canceled its three-row BEV SUV, according to Morgan Stanley analyst Adam Jonas in a note to clients. “Ford scaled back and delayed its EV strategy to match consumer demand (slower) and costs (still too high).”

But what may be most affordable for drivers may not be ideal for the planet.

While standard hybrids have lower lifetime emissions than internal combustion vehicles, annual greenhouse gas emissions from hybrids are about two-and-a-half times those of battery electric vehicles, according to the Department of Energy. And, Cantor noted, cars bought today will likely be on the road for around 10 years.

“Hybrids can’t be the long-term climate solution. They don’t do enough to mitigate emissions,” Cantor said. “To meet climate targets you’re looking all-electric by the mid 2030s.”

You’re out of free articles.

Subscribe to access Heatmap's exclusive climate and energy polling, award-winning journalism, and subscriber-only events. Save $57 on an annual subscription, just $156 $99/year.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Politics

California Just Voted for Single-Payer Wildfire Insurance

Progressive candidate Jane Kim declared victory in the race for California Insurance Commissioner.

Jane Kim and Ben Allen.
Heatmap Illustration/Getty Images, Jane Kim, Ben Allen

Few political wonks outside of California were likely paying much attention to the Golden State on Tuesday night, as Democrats’ anticipated blue wave crested. But the state did have one close, consequential race on the ballot: insurance commissioner. On Friday, Bernie Sanders-endorsed progressive Jane Kim won the race to lead the California Department of Insurance, which oversees the state’s $452 billion insurance market.

Kim declared victory over the more moderate State Senator Ben Allen, who was backed by the California Democratic Party, after reaching a nearly six-point lead on Friday. In a brief speech before supporters, Kim said Allen called to congratulate her that morning. (A spokesman for the Allen campaign confirmed the call to The Orange County Register.) Kim ran on a proposal for a state-run, single-payer insurance program that would cover homeowners against wildfire damage — though the plan would ultimately need approval from both the California legislature and Governor-elect Xavier Becerra.

Keep reading...Show less
Yellow
Data center construction.
Heatmap Illustration/Getty Images

Beyond the repudiation of Donald Trump, if there was one message voters sent on election night, it was that they really don’t like data centers.

Democrats who ran against rampant data center development won at both the gubernatorial level (Amy Acton in Ohio, Gina Hinojosa in Texas) and the senatorial level (Abdul El-Sayed in Michigan, Annie Andrews in South Carolina). The Wall Street Journal counted 125 Democrats nationwide who “targeted their opponents over data centers.”

Keep reading...Show less
Yellow
Mike Levin.
Heatmap Illustration/Getty Images

It’s crunch time for the Senate’s bipartisan permitting reform and transmission bill. In three days, the bill’s authors plan to put the Bipartisan American Affordability and Jobs Act to a vote on the Senate floor. That means there’s probably only three days to finish up an amendment to the bill that addresses critics’ concerns without toppling the delicate balance the authors initially struck to foster bipartisan support.

BAAJA has major implications for climate policy, as it would make it much easier and cheaper to build high-voltage transmission lines that connect renewable energy from where it is generated to demand centers. It includes ratepayer protection provisions that require data centers to pay all of the costs of upgrading the grid so that they can hook up to it. The bill would also speed up permitting for energy projects of all stripes, from solar farms and geothermal plants to pipelines and liquified natural gas terminals.

Keep reading...Show less
Blue