Are hybrid vehicles being phased out?

Hybrid vehicles, which combine a traditional internal combustion engine with an electric motor, experienced a surge in popularity in the late 2000s and early 2010s. However, recent developments in the auto industry have led some to question whether hybrids are being phased out in favor of fully electric vehicles.

Hybrid sales peaked around 2013 and have declined somewhat since then. Meanwhile, many major automakers have announced plans to shift focus and resources toward developing affordable, long-range electric vehicles. With battery prices dropping and charging infrastructure expanding, EVs are becoming more viable for mainstream consumers.

So does this mean hybrids are on the way out? Not exactly. While their overall market share may decrease, hybrids are likely to remain a transitional technology and still fill an important niche in the near future. They provide many of the benefits of electric drive without range anxiety or charging logistics. For buyers who require maximum range or prefer a gas engine, hybrids strike a good compromise.

The Rise and Peak of Hybrid Vehicles

Hybrid-electric vehicles first appeared on the mass market in the late 1990s, with the introduction of the Toyota Prius in Japan and the Honda Insight in the United States. These early hybrid models were able to achieve significantly better fuel efficiency than comparable conventional cars by combining a gasoline engine with an electric motor and battery.

The Prius proved particularly successful, and Toyota sold over 125,000 of the models in the U.S. between 2000 and 2005.[1] Other automakers took note and began developing their own hybrids. By the mid 2000s, virtually every major manufacturer had at least one hybrid model on the market.

Several factors drove the initial rise in hybrid popularity:

– High gas prices in the 2000s increased consumer demand for fuel-efficient vehicles.

– Government incentives in the U.S. and elsewhere provided tax credits for hybrid buyers.

– Hybrids enabled automakers to meet rising corporate average fuel economy (CAFE) standards.

– Consumer interest in “green” products and reducing oil dependence.

– Improving technology brought down the cost of batteries and electric motors.

Hybrid sales accelerated through the late 2000s and peaked around 2013. U.S. sales of hybrids and plug-in hybrids combined topped 495,000 in 2013, up from just over 290,000 five years earlier.[2] The Toyota Prius lifted hybrids into the mainstream and became the top-selling car in California.[3] Other popular hybrid models included the Ford Escape Hybrid and Fusion Hybrid, the Honda Civic Hybrid, and Lexus hybrid luxury sedans.

Factors Driving the Shift Toward Electric Vehicles

Since 2013-2014, hybrid sales have declined modestly even as overall new vehicle sales grew. From 2015 to 2019, U.S. hybrid sales fell from around 480,000 to 325,000.[4] They now make up about 2% of total light vehicle sales, down from a peak of nearly 3.5% in 2013.[5]

Several interrelated factors are responsible for this dip in hybrid demand:

– **Lower gasoline prices** – After spiking to over $4 per gallon in 2008, average gas prices in the U.S. dropped to around $2.50 by 2014 and have remained relatively low.[6] With fuel economy less of a concern, consumers have favored bigger vehicles including SUVs and pickup trucks. Hybrids save the most fuel in city driving, so lower pump prices diminish their appeal.

– **Longer range electric vehicles (EVs)** – Driven by Tesla’s success and rising demand, EV driving ranges have rapidly increased from less than 100 miles to 200+ miles per charge. Long-range EVs can now meet most drivers’ daily needs, reducing the need for gasoline backup.

– **More EV model availability** – Early EVs were mostly limited to small vehicles from startup companies. Now all the major automakers offer electric models including SUVs and luxury vehicles. There are over 40 EV models available in 2021.[7]

– **Falling battery costs** – Lithium-ion battery pack prices have dropped by 89% in real terms from 2010 to 2020.[8] This makes EVs more affordable and profitable for automakers.

– **Charging infrastructure expands** – Continued growth in public charging stations alleviates “range anxiety”. There are now over 43,000 stations in the U.S.[9]

– **Automaker commitments to EVs** – Many automakers have announced plans to phase out combustion engines and transition to all-electric lineups, including GM by 2035 and Volvo by 2030. This focuses investment on EVs.

As battery-electric vehicles become more viable, automakers are shifting R&D and marketing efforts toward EVs and away from hybrids. However, hybrids have some inherent advantages that will continue to make them attractive for certain consumer segments.

Advantages That Hybrids Retain Over EVs

Despite the overall trend toward pure battery-electric drive, hybrid vehicles retain some key strengths especially compared to affordable EVs:

– **No range anxiety** – Hybrids can drive 500+ miles on a full gas tank for long trips or convenience. Most sub-$40k EVs have ranges less than 250 miles.

– **Quick refueling** – It only takes a few minutes to fill up at any gas station. EV charging is much slower.

– **Proven technology** – Hybrid systems have been refined over 20+ years. First generation EV tech can have kinks.

– **Lower upfront cost** – The 2021 Toyota Prius starts under $25,000. The lowest cost long-range EV, the Tesla Model 3, starts around $38,000.

– **Tax credits** – U.S. federal tax credits of up to $4,500 make hybrids more affordable.[10] Credits for EVs are phasing down.

– **Ideal for city drivers** – Hybrids excel in stop-and-go urban driving where they maximize efficiency. Rural drivers may prefer conventional vehicles.

– **Lower maintenance** – Hybrid components like brakes last longer with regenerative braking. EVs also have lower maintenance than gas vehicles.

For many cost-conscious, pragmatic buyers without access to home charging, compact hybrid hatchbacks remain compelling choices.

Hybrid Niche Markets

Although hybrid sales have dropped from their peak, global sales will still likely top 5 million vehicles in 2021.[11] Toyota and other major players like Hyundai and Ford remain committed to hybrids for the foreseeable future.

Certain vehicle segments seem especially well-suited for hybrid drive including:

– **Affordable compact cars** – The sub-$25k Prius Liftback and Prius C dominate this price-sensitive urban market. Hyundai Ioniq and Kia Niro hybrids are also strong contenders.

– **Midsize family sedans** – Bestsellers like the Toyota Camry, Honda Accord, and Hyundai Sonata hybrids offer thriftier family transportation.

– **Plug-in hybrids** – PHEVs like the Toyota Prius Prime and Ford Escape plug-in provide useful electric range while retaining gas backup.

– **Hybrid SUVs** – SUVs like the Ford Escape, Toyota Highlander, and Toyota RAV4 hybrids get excellent economy while maintaining utility.

Hybrid technology also continues to spread into commercial vehicles and niche applications:

– **Hybrid trucks** – Ford, GM, and Ram all offer hybrid options on full-size pickups like the F-150 and Silverado to boost capability and reduce emissions.

– **Plug-in hybrid trucks** – Upcoming pickups from Ford and Hyundai will feature larger battery packs for ample electric driving range.

– **Hybrid performance cars** – Sports cars like the Acura NSX, BMW i8, and Ferrari LaFerrari demonstrate hybrid tech combined with ultra high performance.

– **Hybrid taxis/rideshares** – The durability and efficiency of hybrids make them well-suited for high-mileage professional service. Toyota has sold hybrids to taxi and rideshare operators.[12]

The Future of Hybrid Vehicles

Hybrids face a crossroads in the coming decade. On one hand, falling battery costs and more long-range, affordable EVs could make them redundant for some use cases. But hybrids still solve range, refueling, and upfront cost issues compared to early mass-market EVs.

Toyota, which pioneered hybrids, remains committed to the technology. They have sold over 17 million hybrids globally since 1997.[13] Toyota plans to offer a hybrid version of every model by 2025.[14] Other major players like Hyundai and Ford also continue to invest in hybrid tech.

Some analysts see hybrids transitioning to a niche role as EVs expand. One study predicts that global hybrid sales will peak around 2028-2029 before tapering off.[15] However, they are expected to remain a sizeable portion of the market through at least 2040.

Government regulation could also dictate a continued role for hybrids. If fuel economy and emissions standards tighten, hybrids may again be needed to help automakers meet fleet targets. Electrification combined with clean fuels like renewable diesel enables deep decarbonization of transportation.

In summary, while the hybrid segment is contracting, well-engineered models that maximize efficiency and value will still appeal to pragmatic buyers. Automakers have sunk huge investments into constantly improving hybrid tech over 20+ years. That momentum will sustain hybrids as a key transitional vehicle category through the next decade and beyond.


Hybrid vehicles are not likely to be fully phased out any time soon, but their popularity has peaked amidst the accelerating shift to all-electric cars. Lower gas prices, falling battery costs, more capable EVs, charging infrastructure, and automaker commitments to electrification have created headwinds for hybrid sales. However, hybrids retain inherent advantages in affordability, range, refueling speed, and proven technology. They continue to fill an important niche especially for budget-conscious drivers, urban commuters, and commercial transportation. Hybrids help automakers meet stricter regulations so remain part of the vehicle electrification landscape. But their role is transitioning toward greater market segmentation rather than general popularity. The next decade will see hybrids consolidating around affordable high-efficiency models and plug-in hybrids that maximize flexibility for drivers not yet ready to go fully electric.

Year Total U.S. Hybrid Sales
2000 9,350
2005 151,254
2010 290,271
2015 484,410
2019 325,684

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