Hybrids Help Keep Automakers’ Electrification Plans Afloat
Hybrids Made Up 15% of US Auto Sales in Q3
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Like most U.S. car dealers, Scott Kunes has some electric vehicle whiplash.
In the third quarter, he sold EVs like ice cream at the beach. However, after federal purchase incentives expired at the end of September, those models have beentough to moveat his company’s 50 or so Midwest stores selling about 20 different brands, from Mitsubishi to Mercedes-Benz.
But buyers aren’t necessarily turning to gas guzzlers. On Kunes’ lots, hybrid vehicles are in high demand, a preference that’s playing out across the country. While fully electric cars and trucks made up 10% of all auto sales in the U.S. in the third quarter, another 15% of transactions were for hybrid vehicles.
The EV market is slowing in the U.S., but analysts expect hybrid sales to continue accelerating. CarGurus Inc., a digital listings platform that covers most of the U.S. auto market, predicts nearly one in six new cars next year will be a hybrid, as automakers green-light more and better machines with the technology. And though these cars and trucks will still burn gas, they will quietly move the needle on both transportation emissions and the transition to fully electric cars and trucks.
Kunes is even more bullish; he figures in the near future, more than half of his business will be hybrid vehicles. “We have so much investment in EV and battery technology, and we need to figure out the best possible use of it,” he said. “There’s a lot to be said for hybrids becoming the most dominant powertrain out there and real soon.”
With federal purchase incentives worth up to $7,500 wiped out by the Trump administration, EV sales are expected toplunge 30%in the fourth quarter and remain flat through much of next year. But Americans worried about affordability see hybrids as a pragmatic way to cut fuel expenses and emissions.
“They offer consumers a little bit of everything,” said Peter Nagle, associate director of Americas demand forecasting at S&P Global Mobility. “I think the demand is only going to keep going from here. Their utilitarian nature “might appeal more to rural, red state customers,” he added.
Discover what we experienced behind the wheel of the 2026 Hyundai Palisade Hybrid. Comfort and efficiency redefine family travel. — CarGurus (@CarGurus)
CarGuruscallshybrids the success story of 2025. Indeed, the fastest-selling car in the country this year has been the Hyundai Palisade Hybrid; it sat on lots for fewer than 14 days on average.
Of the roughly 390 distinct car models on the U.S. market, roughly 87 are available with hybrid technology, nearly 50% more options than drivers had five years ago, according to Edmunds.com. While carmakers have struggled to turn a profit on fully electric vehicles, analysts say their investments in batteries and electric motors are helping them sell more and better hybrid machines.
It’s also increasingly difficult to discern a hybrid from a solely gas-powered model, said Scott Hardman, assistant director of the Electric Vehicle Research Center at the University of California atDavis. Carmakers today often don’t even label a hybrid as such. Consider Toyota’s RAV4, one of the best-selling vehicles in America. The 2026 version of the SUV comes in six different variants, all of which include an electric motor and a gas tank.
“A hybrid is just a regular car now,” Hardman said. “You can buy one by accident.”
Kunes, the Midwest dealer, said most of his customers don’t pay much attention to how the vehicle propels itself; they’re just looking for the most affordable option. “People don’t necessarily come in looking for a hybrid vehicle,” he explained, “but they don’t mind taking one.”
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While not as clean as an electric vehicle, hybrids offer sneaky carbon cuts as well. Americans, on average, driveabout 38 milesa day, which requires about one gallon of gas in most basic hybrids. Contemporary plug-in hybrids, which can run on all-battery power, can cover almost that entire range without the gas engine kicking in. And asmall crowd of carswill do even better, stretching their batteries well over 40 miles per charge.
All told, hybridization can reduce the carbon dioxide emissions of a vehicle by roughly20% to 30%, according to the International Council on Clean Transportation.
And Americans will soon have even more hybrids to choose from. As automakers retool their paths to electrification, many are doubling down on hybrids and acknowledging that they will be more than a brief stepping stone in the transition to full EVs.
This month, Ford Motor Co. said itwould scrapits electric F-150 Lightningpickup and use its assembly lines to stamp out a new extended-range hybrid pickup, in part because it had invested so much in battery capacity. By 2030, Ford expects half of its global sales to be fully or partially electrified vehicles.
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Toyota Motor Corp. is already atthat level, in part thanks to all those hybrid RAV4s. Meanwhile, Honda Motor Co. Ltd. is steering for the same lane, basingits entire businesson hybrids until at least 2030.
Ultimately, hybrid cars and trucks may prove to be as powerful as federal incentives in fueling EV sales. Around one-third of hybrid drivers transition to a fully electric vehicle when they next switch cars.In September, some 57% of car shoppers were considering a fully electric auto, according to J.D. Power. However, among hybrid households, that share was almost 70%.
“I don’t necessarily think you buy that car and fall in love with that tiny electric motor,” Hardman said. “But after a while, people think, ‘Actually, driving electric is pretty nice. One thing I don’t like about my hybrid is when the engine kicks on, or I have to go to a gas station.’ ”
