Demand for hybrids surges as Americans rethink car choices

Americans are changing what they want from their cars as gasoline prices rise above $4 a gallon. Hybrid vehicles are emerging as a major winner, and Asian markets are benefiting.

Hybrids gain momentum
Hyundai’s US hybrid sales jumped 39% in the third quarter, while Kia’s sales soared 152%. Toyota recorded a 29% increase, and Honda’s hybrid sales climbed 21%.

These cars appeal to drivers because they combine a gasoline engine with an electric motor, improving fuel efficiency without needing to charge. They also tend to cost less than fully electric vehicles, making them a practical choice as fuel costs rise.

Detroit has fewer options
The shift is exposing a major weakness for Ford, General Motors and Stellantis. American automakers offer relatively few hybrid models after spending years focusing on larger SUVs and pickup trucks.

Asian automakers captured more than 50% of US new-car sales in Q3, according to Cox Automotive, while domestic automakers’ share dropped to a record-low 36%.

That’s not all
Hyundai and Kia nearly overtook Ford in US sales during the quarter. The Korean automakers sold about 506,200 vehicles combined, compared with Ford’s 509,764.

Meanwhile, fully electric vehicle sales have weakened. Tesla’s third-quarter sales fell 2% from a year earlier, while the end of the $7,500 federal EV tax credit has made electric cars less affordable.

With fuel prices climbing, buyers are increasingly rewarding automakers that offer affordable, fuel-efficient choices.