Electric vehicles are still no match for hybrid models, raising questions across the American car industry.
The rush of automakers to produce more electric vehicles (EVs) may be premature, new data shows. The general public in the United States, the world’s largest economy, seems more pointed toward hybrid cars than full-electric ones.
Hybrid cars use fuel to power an electric motor, consuming much less than gasoline cars but still using regular gas to move forward. They are considered a more eco-friendly alternative to fuel vehicles, though environmental groups push for all-electric to solve the climate crisis.
According to Morgan Stanley, sales of hybrid cars increased five times faster than electric vehicles in February. Ford Motor, the US’s most popular car brand, sold 37% more hybrids in the January-February period. The Ford Maverick hybrid was the brand’s most popular model in early 2024.
Yahoo! Finance reported the example of Jeremy Ashton, an East Coast consumer in need of a new car. Ashton was not convinced by Ford’s all-electric truck, citing concerns about the charging time. He then decided to purchase a Ford F-150 hybrid for $60,000.
Like many other American customers, Ashton was steered away from fuel-only cars because of rising gasoline prices. Hybrid models represented the right compromise for him.
Political debate
The future of the American car industry is closely related to the 2024 US elections. Republican candidate Donald Trump is vocally against the support of EV production, while Democrats currently push for a faster transition.
The Biden administration issued several policies to support EV sales. A new measure coming up this month is expected to force automakers to increase the share of fully electric vehicles they sell to as much as 60% by 2030.
However, the consumer market is not responding how policymakers would like. As long as customers prefer hybrid vehicles, any push toward full electrification of the car industry will be premature.
"Hybrids are a big hedge against an administrative change that cools down the push from a regulatory standpoint," said the head of AlixPartners’ global automotive practice Mark Wakefield.
China’s big push for the EV industry also hampers the electrification of the American car industry. In 2023, China became the world’s largest producer of electric cars, taking Japan and Germany’s spot.
Scared of China’s EV efforts, the European carmakers are equally pushing for electric car production. The European Union announced plans to ban gasoline car sales by 2035. The Japanese brands Nissan and Honda also announced a partnership for EV production.
Toyota, the world’s largest car brand, has yet to fully commit to electric cars, pushing new hybrid models out of the production lines.
It’s unclear which strategy will work best. The car industry is undergoing a global revolution, whose outcome is anything but established.
