The race among American automakers to design hybrid vehicles is intensifying as electric vehicle (EV) sales begin to slow. With hybrid vehicles expected to make up 20% of U.S. car sales by next year, surpassing EVs, manufacturers like General Motors are ramping up production to meet the growing demand. This shift marks a significant pivot from previous plans to transition entirely to electric fleets, highlighting the hybrid as a viable compromise amidst declining interest in pure electric options.
- Hybrid vehicles are gaining rapid growth in the U.S., with projections to constitute 20% of sales by next year, outpacing EVs.
- American manufacturers, including General Motors, are increasing their hybrid production in response to the rising demand, despite initial electric transition plans.
- Hybrids offer a middle ground, catering to the dwindling demand for purely electric vehicles.
- As global demand for electric cars falls, hybrids are set to consume all production resources of American manufacturers, potentially representing 20% of sales by next year, compared to just 12% for EVs.
The hybrid surge in the U.S.
In the United States, the sales of hybrid vehicles have been skyrocketing, with February seeing a growth rate five times that of electric vehicles, according to Morgan Stanley. Stellantis reported that the plug-in hybrid version of the Jeep Wrangler accounted for half of Wrangler's total U.S. sales in the second half of 2023, up from 37% in the first half. Ford's hybrid vehicle sales, fueled by the hybrid Maverick pickup's demand, jumped nearly 37% in the first two months of the year. Scott Simmers, a dealer in Cathedral City, California, noted, “The most popular car right now is the hybrid Maverick.” This model represents almost half of Maverick's sales, with dealers stating they could sell more if Ford could supply them adequately.
Hybrids vs. electric vehicles: The profitability debate
The industry's pivot towards hybrid vehicles casts doubt on the Biden administration's climate policies favoring electric vehicles. Environmental advocacy groups pushing for a rapid phase-out of combustion engines are also feeling undermined. The White House is expected to release CO2 emission standards this month, compelling automakers to increase the share of fully electric vehicles sold to 60% by 2030. However, the upcoming presidential election puts at risk the subsidies provided to electric vehicles and emission rules. Most automakers are losing money on electric cars, finding hybrids more profitable for reducing CO2 emissions.
Toyota, Ford, and Honda ramp up hybrid production
Driven by Toyota, Ford, and Honda, North American production of hybrid vehicles is expected to reach 20% of the total light vehicle production by 2025, with electric vehicles accounting for 14%, according to Auto Forecast Solutions (AFS). While electric vehicle forecasts have been cut by about one million units in 2023, hybrids have seen a corresponding increase. Schaeffler, a German company, plans to invest $230 million in a new plant in Dover, Ohio, to boost production of electric axles used in hybrid drive systems, currently supplying key components for Ford F-150's hybrid systems.
Ford's F-150 hybrid gains popularity
Ford has stated its intention to double the sales share of F-150 hybrids to 20%. Marc McGrath, Schaeffler's operations director, expects even broader adoption of hybrid powertrains for trucks and large SUVs. The demand for hybrid vehicles is consumer-driven, with many opting to switch from gasoline vehicles to hybrids. In the U.S., where pickups reign supreme, the F-150 hybrid is king, selling at the same price as its gasoline-only counterparts. Notably, the all-electric Ford Lightning model has not been as well received. With fuel efficiency significantly better than its V8-equipped gasoline counterpart, the F-150 hybrid boasts less than 10 liters per 100 kilometers, making it a more economical choice.
Toyota capitalizes on the hybrid trend
Toyota, a long-standing leader in the U.S. hybrid market, is seeing a significant increase in the overall sales of its hybrid models. David Christ, head of the Toyota brand, highlighted the growing popularity of hybrids; “Last year, hybrids represented 29% of our sales. Since the start of the year, it's 37%. We expect this figure to approach 45% of our total volume this year.” Consequently, the new generation of Toyota's Camry sedan, launching this year, will only be offered with hybrid powertrains. Toyota has narrowed the price gap between hybrid vehicles and their combustion engine counterparts, making hybrids more accessible and valuable to owners.
Discover the Breathtaking Skyline Parkway: The Ultimate Motorcycle Adventure in Duluth, MN!