Toyota Motor (TM) and Hyundai are pulling ahead of rivals by betting heavily on hybrid technology as American car buyers cool on fully electric vehicles.
Second-quarter U.S. vehicle sales are splitting the auto industry into clear winners and losers, with hybrid-equipped automakers outperforming those without them.
Toyota reported a 1.1% increase in its second-quarter sales, powered by a roughly 20% increase in sales of electrified vehicles across its lineup.
Hyundai also posted strong growth driven by hybrid demand, including its best-ever hybrid vehicle sales month, which was up 90% year-over-year.
General Motors (GM), by contrast, experienced a 4.2% sales decline, weighed down by a broad lineup of EVs and only one hybrid model, a Corvette.
Cox Automotive expects Tesla (TSLA), which does not report regional sales figures, to be off more than 20% during the second quarter.
EV demand fell sharply last year as consumers rushed to purchase electric vehicles ahead of the Trump administration potentially ending up to $7,500 in consumer incentives.
U.S. hybrid sales rose 37% in the two months since the Middle East conflict began at the end of February, far outpacing the overall car market, which grew just 15% in the same period.
By comparison, U.S. EV sales rose only 11% during that stretch, falling below the broader market’s growth pace even as gasoline prices topped $4 per gallon.
Analysts and dealers say hybrids appeal to buyers because they are generally less expensive than EVs and require no changes to daily driving routines, such as overnight charging.
Hybrids also eliminate the range anxiety associated with fully electric vehicles while still delivering meaningful fuel economy improvements over traditional internal-combustion models.
The contrast between GM and Toyota has drawn attention from Cox Automotive, which noted the Japanese automaker is rapidly closing its sales gap with the Detroit-based industry leader.
“At these rates, and what we’re seeing right now in the selling rates, GM may be looking over their shoulder here when we get to the year’s end, that Toyota could potentially overtake them as the top selling manufacturer here in the U.S. market,” said Charlie Chesbrough, senior economist and senior director of industry insights at Cox Automotive.
The shift toward hybrids signals a broader recalibration of American consumer preferences as affordability, convenience, and fuel efficiency increasingly outweigh the appeal of going fully electric.
