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Many U.S. car buyers are gravitating toward hybrid vehicles to offset the recent spike in gasoline prices since the Iran war, according to new sales data from the industry and dealers.
US hybrid sales have risen 37 percent in the two months since the conflict in the Middle East began at the end of February, according to data from research firm Motor Intelligence. That outpaced sales growth for the overall auto market, which rose 15 percent during that period.
But fully electric vehicles have not attracted the same level of consumer interest, as US gasoline prices rose $4, to a four-year high in late April, according to data from the American Automobile Association.
Sales of electric vehicles in the US have risen just 11 percent in the two months since the war began, below the broader sales rate, Motor Intelligence figures show. EV sales remain well below what they were last year, still depressed following the expiration last fall of the $7,500 US federal tax credit.
The relative indifference of American consumers to EVs differs from the trend in Europe, where electric sales are booming amid high fuel prices. There are many affordable EVs sold in Europe, where tailpipe emissions regulations are much stricter than in the US.
In the United Kingdom, EV sales jumped 79 percent in the two months after the start of the Iran conflict, which is a sharper rise than the broader market. Sales of German fully electric cars also outpaced the rest of the industry, rising 39 percent over the period.
The hybrid is an easy hedge for some buyers
Analysts and dealers point to several reasons why hybrids – which use a lithium-ion battery and an electric motor to assist the gas engine, to save fuel – have become an option for US consumers looking for a “green” car.
Hybrids are generally less expensive than EVs, and there are many models to choose from. Also, owners don't have to learn new technology that requires them to change their daily routine, such as plugging in the car at night.
“People were already interested in hybrids before gas prices started going up,” said Kevin Roberts, director of economics and market intelligence at online marketplace CarGurus. “High gas prices just drive that interest rate up even more.”
Digital shopping data shows growing consumer interest in both hybrids and EVs. Of all car searches on the CarGurus site in April, 14 percent were for hybrids, up from 12 percent the previous month. EV searches accounted for 5 percent, up from 3.4 percent.
“Customers look at every penny,” said car dealer Brad Sowers, who owns Kia, Stellantis and General Motors stores in the St. Louis area. At its Kia business, hybrids accounted for 35 percent of total sales in April, up from about 30 percent in March.
Toyota Motor has benefited from the growing popularity of hybrids, a technology it pioneered in the late 1990s with the introduction of the Prius. In the past few years, Toyota has moved to offering only hybrids in its two best sellers, the RAV4 SUV and the Camry sedan.
In the two months since the Middle East conflict began, Toyota's electric vehicle sales in the US have grown 34 percent, a rate that largely reflects a growing hybrid business, and a very small number of full-size EVs. Overall Toyota sales in the US grew 23 percent during that period.
Trucks still rule, despite high fuel prices
The increase in fuel prices does not worry some car buyers. The number of large trucks purchased in March and April rose 20 percent from February, before the war, according to Catalyst IQ, which sells data services to dealers.
Todd Szott, a car salesman at Toyota, Ford Motor and Stellantis dealerships in Michigan, said customers are sensitive to gas prices, but are more influenced by any deals they make. In many cases, large discounts are available on gas-powered vehicles.
“We still sell a lot of trucks,” he said.
