Driving Towards a Greener Future: The Rise of Hybrid Cars in the Automotive Industry's EV Revolution

Major automakers are shifting their strategies towards hybrid cars and trucks to meet consumer demand and avoid costly penalties related to fuel economy and emissions standards, as sales of all-electric vehicles grow more slowly than expected. While the automotive industry has invested billions in all-electric vehicles, hybrid vehicles could help lower fuel consumption and emissions in the short-term while easing consumers into vehicle electrification.

Edmunds reports that sales of traditional hybrid electric vehicles, such as the Toyota Prius, have exceeded those of all-electric vehicles in 2023. About 1.2 million HEVs were sold in the US through November, accounting for 8.3% of car sales and showing a 2.8% increase compared to last year's total sales. In contrast, EVs made up 6.9% of sales with roughly 976,560 units sold heading into December, indicating a 1.7% rise in comparison to last year's total sales. Sales of plug-in hybrid electric vehicles (PHEVs) only accounted for 1% of US sales through November.

According to a report published by Allied Market Research, the global hybrid electric car industry size generated $229.2 billion in 2022, and is anticipated to generate $489.7 billion by 2032, witnessing a CAGR of 7.8% from 2023 to 2032.

Despite new electric vehicle market share and sales hitting a record in the U.S. this year, EV growth is starting to slow and fall short of the auto industry's lofty ambitions to transition away from combustion engines. Hybrid vehicles can address concerns commonly associated with EVs, such as range anxiety and lack of charging infrastructure, while being relatively cheaper. According to Edmunds, the average cost of a hybrid this year was $42,381, which is lower than the average cost of an EV at around $59,400, a PHEV at $60,700, and a conventional vehicle at $44,800.