A growing number of car shoppers are considering making the switch from traditional gas-powered vehicles. However, many are finding that hybrids, which combine a traditional internal combustion engine with an electric motor, offer a more appealing option.
One reason for this shift is that hybrids allow drivers to save money on gas without having to make any significant changes to their driving habits. As Ford CEO Jim Farley said, "customers don’t have to change their habit on hybrid." This benefit is immediately apparent, as drivers can see the savings over time.
On the other hand, EVs still face several challenges, including range anxiety, concerns about repair costs and resale value, and unfamiliar controls. For many shoppers, these factors make hybrids a more attractive choice.
Of course, EVs still offer significant environmental benefits, as they produce no emissions and allow drivers to avoid gas stations entirely. However, hybrids provide a more affordable option that still reduces emissions and gas station visits compared to traditional vehicles.
Dealers and automotive executives are seeing this trend firsthand. Many shoppers who initially express interest in EVs ultimately choose a hybrid instead. As Doug Eroh, president of Longo Toyota in El Monte, Calif., told the Wall Street Journal, "I think there is a halo effect from EVs."
In a recent consumer survey by Boston Consulting Group, 56% of "next-wave adopters" and 43% of "longer-term adopters" reported that they would consider a hybrid if their needs aren't met by fully electric vehicles. Even among "EV holdouts," 17% said they would consider a hybrid.
While EV sales are growing, they're not expanding as quickly as automakers expected. This has led to price cuts and increased incentives from companies like Tesla. Meanwhile, hybrid sales are surging, with 14% of new vehicles sold in the U.S. this year expected to be hybrids, compared to 10% for EVs.
With strong demand for hybrids, Toyota and Honda have been able to boost earnings by cutting sales incentives for hybrids. As Toshihide Kinoshita at SMBC Nikko Securities told the Nikkei, "Toyota's Camry and Corolla hybrids have been selling well without discounts."
In conclusion, while EVs offer many benefits, hybrids are proving to be a more appealing option for many car shoppers. As range anxiety, repair costs, and unfamiliar controls continue to be concerns for potential EV buyers, hybrids provide a more affordable, practical, and environmentally friendly alternative.