Summary
- Hybrids generally have lower upfront costs than EVs and qualify for government incentives, making them more accessible
- Greater range and charging flexibility offered by hybrids, particularly PHEVs, address concerns about running out of power
- Hybrids require less charging infrastructure, especially PHEVs, making them more convenient for many drivers
- Their longer track record of reliability and consumer trust, make hybrids a safer choice for some buyers
- Hybrids provide a gradual transition to electric driving, allowing consumers to experience electric benefits without fully committing to EVs
As the cost of living continues to soar, drivers increasingly seek efficient and accessible transportation options. Many people are enticed by the potential benefits of electrified vehicles, whether it’s a hybrid electric (HEV), plug-in hybrid (PHEV), or a battery electric (BEV) also known as an all-electric vehicle (EV). But in the case of the latter, not everyone can afford the upfront costs of EV adoption. Other factors like the EV fire myth, inconsistent charging experience, charging times, and range anxiety are major barriers for many potential EV drivers.
As a result, more and more drivers are opting for hybrid cars. The rationale is that when you buy a hybrid instead of switching to an all-electric car you’re gradually transitioning to electric mobility, especially if you opt for a plug-in hybrid. With a PHEV, you get the benefits of electric driving, such as zero emissions and lower fuel costs, while still having the flexibility of a traditional gas-powered vehicle you can fill up at the pump.
This article delves into the reasons hybrid cars are outpacing EV growth and how the gap between the two types of electrified vehicles may change in the coming years.
Affordability and Accessibility of Hybrid Vehicles
One of the most important reasons hybrids continue to outsell EVs is their affordability. Although prices for EVs are dropping as battery technology improves, hybrids still offer a more budget-friendly option. In Q1 2024, we discussed why hybrids are winning the electrified vehicle wars. And we were correct in our predictions.
According to a recent analysis by the U.S. Energy Information Administration, HEV sales rose 30.7% year-over-year. In 1Q24 they represented 8.6% of all light-duty vehicles sold, climbing to 9.6% in 2Q24. In 1Q24, BEV sales grew at a slower pace than in the previous year. In 2Q24, they held a 7.1% share of the U.S. LDV market, matching their 2Q23 share.
These numbers correlate with several major automakers readjusting their EV plans for 2030, and investing in developing hybrid powertrains such as Volvo and Porsche. Going forward, lower mortgage interest rates will likely continue to impact the US share of electric and hybrid vehicle sales. The Federal Reserve lowered interest rates in 2024, increasing consumer purchasing power and making them more likely to purchase higher-priced items like electric or hybrid vehicles.
Lower Upfront Costs
Hybrid cars typically come with a lower price tag than fully electric vehicles. For instance, the base Toyota Camry hybrid starts at $28,400 while a Tesla Model 3 will set you back $34,990. While some affordable EVs exist, they often offer battery capacities, limiting their driving range and appeal.
This price gap makes hybrids more accessible to the average buyer. According to Automotive News, many hybrids have sticker prices under $30,000. The average transaction price for an EV almost doubles that, exceeding $57,000 in May. Therefore, for families and individuals looking to make an eco-friendly choice without financial strain, hybrids provide a lower barrier to entry.
Government Incentives
In many regions, plug-in hybrid vehicles qualify for government incentives or tax credits, though the focus is increasingly shifting toward full EVs. These incentives help reduce the effective cost of purchasing a hybrid, particularly for plug-in hybrid electric vehicles (PHEVs), which often receive larger tax rebates than traditional hybrids.
While EVs also benefit from similar programs, the combination of lower base prices and available incentives gives hybrids an advantage regarding overall affordability. Additionally, hybrids generally require fewer adjustments to infrastructure. EVs, in contrast, can entail extra costs for home charging stations or reliance on public charging networks, which may not be conveniently located for many consumers.
Lower Charging Infrastructure Costs
While data shows that EV charging is cheaper than fueling, hybrids don’t require the extensive charging infrastructure that full EVs do. A traditional hybrid doesn’t need charging at all, while a PHEV can be charged via a standard electrical outlet without needing high-powered chargers.
In rural areas or regions where EV infrastructure is still developing, hybrids and PHEVs provide a practical and cost-effective solution. Drivers can enjoy electric power when possible but still rely on gasoline when necessary, eliminating the need for frequent stops at charging stations.
Range Anxiety and Charging Convenience
Another key reason why hybrids and PHEVs are outselling EVs is the convenience they offer in terms of driving range and charging flexibility. EVs can’t yet match the universal convenience of hybrids, which continue to appeal to drivers who prioritize flexibility and minimal disruption to their daily driving habits.
Gasoline Backup
For many drivers, the fear of running out of power—often called “range anxiety”—remains a significant concern with fully electric cars. While modern EVs have made great strides in improving range, most still require meticulous planning for longer trips. Public charging infrastructure is growing, but in many areas, it is still inconsistent. Long-distance drivers may worry about whether they will be able to find a fast charger when they need it.
Hybrids, on the other hand, eliminate this concern. A traditional hybrid will seamlessly switch to gasoline power when the battery runs low, and PHEVs offer the same convenience. This means drivers can travel long distances without worrying about being stranded if they can’t find a charging station.
Charging Flexibility with PHEVs
PHEVs provide a great compromise for those interested in reducing their gasoline consumption without fully relying on electric power. A PHEV offers the option to drive on electric power for short trips and daily commutes, often delivering between 20 and 50 miles of range on electricity alone. When the electric range is depleted, the gasoline engine takes over, extending the vehicle’s overall range without the need to stop for a charge.
With a PHEV, the pressure to find a charging station is far less than with a fully electric vehicle, and this convenience is a major selling point for many buyers.
Charging Infrastructure Gaps
The lack of widespread and reliable EV charging infrastructure remains a significant barrier to EV adoption. In many rural areas and even some urban centers, charging stations can be few and far between. Moreover, the time it takes to recharge an EV, even with fast charging, can be a deterrent for drivers who are used to the speed and convenience of refueling a gasoline car.
Hybrids and PHEVs bypass this problem entirely. Since they can run on gasoline when necessary, hybrid drivers don’t need to worry about planning trips around charging station locations or waiting for a battery to recharge. This flexibility makes hybrids far more convenient for the average driver, particularly in areas where EV infrastructure is still in development.
Hybrid Technology Maturity and Consumer Trust
Hybrid vehicles have been on the market for over two decades, and this established technology gives them a clear edge in terms of reliability and consumer trust. EVs, though improving rapidly, are still relatively new and unfamiliar to many drivers.
Proven Reliability
Hybrids have been tested and refined for years, with models like the Toyota Prius demonstrating long-term durability and low maintenance costs. Consumers have come to trust hybrid technology, knowing it offers a reliable and fuel-efficient alternative to traditional gasoline cars. While EVs are generally considered low-maintenance, concerns about battery longevity and the cost of replacement still linger for many potential buyers.
Better Resale Value
Resale value is another area where hybrids often outperform EVs. While electric cars can suffer from rapid depreciation, especially as new models with better range and features are introduced, hybrids tend to hold their value better. This is partly due to the concerns surrounding EV battery degradation and the perception that hybrids offer a more practical, long-term solution.
Incremental Transition to Electrification
Finally, many consumers see hybrids as a way to ease into electric driving without fully committing to a new and unproven technology. For drivers who are curious about electric vehicles but hesitant to make the switch, a hybrid or PHEV offers a perfect middle ground. Hybrids allow drivers to experience some of the benefits of electric driving—such as lower or zero emissions driving—without sacrificing the convenience of a gasoline-powered vehicle.
Conclusion
While hybrids offer a practical, more affordable alternative to fully committing to an all-electric car, there’s no doubt EVs will eventually dominate the market. However, due to infrastructure gaps and current trends, the transition to fully electric vehicles is taking longer than the auto industry initially predicted.
